<And then the new equipment. Granted, the stuff at airports needs updating, but knowing what you know about how corporations and Federal money interact, is it likely that the top-of-the-line, high tech, security equipment is being sold to the government at a slight markup? Or that maybe low-tech, more practical solutions are being overlooked (like armed air marshalls or armed pilots) in favor of mandatory magic bomb detectors that would have to be purchased by every large airport at ruinous cost and massive profits?

Supply and demand applies to things like high-tech security equipment, too. Those units were never cheap. Given the demand that existed before 9-11, the factories where those machines were built were set up to produce a given number of machines each year.

Suddenly, the demand is much higher than before. As a result, the companies may have to hire 2nd or even 3rd shifts, expand their production lines, etc. to try and meet the demand. None of that is cheap.

Increasing production doesn't always lower the unit price. There's also the issue of subcontractors who may have to increase their staffs and/or expand their own production lines. Higher demand can create shortages, allowing the manufacturers to increase their prices. If the demand stays high, companies will be willing to invest their capital in expanding production. Once again, the market works.