I'm not sure there actually is a ton of money to be made on a leather case priced lower than Apple's.
Apple's bulk buying power and manufacturing resources put it way ahead of the means of most potential competitors.
Combine that with the fact that most people who want a leather case will probably just buy the one that's quickest and easiest to buy, the one that they can easily examine in person, and the one that is most easily returnable if they don't like it. Only one leather case ticks all those boxes...Apple's.
So after you factor out all the potential leather case customers that will swallowed up by Apple, there probably just aren't enough customers left to make the considerable undertaking of producing a leather case worthwhile.
Remember, to make a case like Apple's, a manufacturer would need;
-Thin durable leather in a variety of colors.
-A shell precision designed to accomodate the leather and lining, while being easily installable/removable.
-2 sizes for the shell.
-Precision machinery or skilled labor to do the binding/glueing/assembly.
And after the effort and investment put into expensive leather and machines/labor, Apple is gonna change the phone in 12 months, likely rendering the case design obsolete.
Given the costs and short lived demand, most smaller players in the case market will just opt for robotic production of injection molded cases that don't require a large investment in exotic materials and skilled labor.
That's why nicely made leather cases from companies other than Apple are typically more expensive than Apple's.