If the quality of the products is great and comparable to higher-end lines, then I don't really see the problem with them being priced higher as well. They are diffusion lines for brands that either have their own shops or are featured in luxury stores (and are more than twice as expensive). The price point is higher than the average Target wares, but they're still much cheaper than their sister lines. I think that's kind of the idea here - brand name and, presumably, brand quality, for a more affordable price.
It's kind of interesting marketing experiment. I'm curious to see how it does.