I'm not sure about all the reasons why the titanium tools are that much more expendive than steel tools, but there are some differences in working titanium alloys that can cause tools to be more expensive.
When titanium is hot forged, the titanium or titanium firescale can actually catch on fire. From what I understand, some machining operations can also cause enough heat for titanium to catch on fire as well.
I believe that due to the same issues that can cause titanium to ignite when firging or machining, titanium slloys are usually cast using a vacuum investment casting method, which is much more expensive than casting methods like sand casting that can be used for many iron alloys.
Some of the stronger, harder, or more corrosion resistant titanium alloys actually contain other expensive metals like silver, platinum, or gold, which even in small quantities can make the better titanium alloys very expensive.
Hardening hardenable titanium alloys may need to be done using precipitation hardening, carried out over a longer time period than some other metal alloys. The extra time it takes can add a lot to final cost.
Titanium can be prone to galling in use. Tools and other items made from titanium may need additional surface coatings or finishes, like physical vapor deposition, coatings, or anodizing, that can add to the cost.
Titanium can work harden when it's being machined. This combined with the galling issue can make titanium much more difficult to machine. Cutters usually also need to be the more expensive coated type to help mitigate the galling issue. I've read that high pressure, using a coarse blades may work best, however this would require larger, heavier, more expensive machinery, and machinists experienced working titanium.