Prizes permit economies of scale; and litigation-aversive R&D isn't needed (unlike w/ cars)
>>>What this all means is that all the stuff is one-offs... which means they are very expensive for two reasons 1) You can't spread the engineering costs out over millions of products. 2) You can't mass produce, which is how you really get the production costs down.<<<<
Why not, if competitive prizes are offered? A couple of companies (or a single one) could wind up providing units for many different competitors. We'd consequently not have an economy of scale of millions, but we would of considerably more than the NASA tax leeches have.
As for your General Motors car R&D analogy, much of that is done to avoid headaches involving potential lawsuits for design defects right? There wouldn't be a similar need with Mars rover R&D.