Do keep in mind that exporting stuff costs money, too and European shops generally show prices with VAT included, where in the US it is added at checkout. By adding an approximate EU VAT rate of around 20% we get about 290€ and adding import taxes we get suspiciously close to that price of 350€.
Although I do agree that 350€ or $ is a lot of money. I already suggested that maybe they could make a 'light' version of the batch 2, using the exact same hardware and software (no additional R&D costs) and further reduce costs through cheaper materials (no metal parts, just all plastic). That should allow them to drop the price drastically, especially since a device at half the cost opens a much wider market. I don't really see why not to make a cheaper Passport.