I think the reason is that your income and pop grows exponentially (well, it might not actually do that, maybe more like a power function or something, but something like that), so they made land costs increase like a power function.
I do think it's a too "steep" function (I wrote more details about it earlier in this topic), but they say eventually war will become the cheapest method of gaining more land, so I guess that's their reason.
Yes it's becoming painfully expensive.