I really can't see how that hair should be so expensive. Its about a dozen or so cloth strips with alpha textues of hair on them. We've been able to simulate dozens of choth strips for ages. And many games do so, just not for hair.
The real proble I think is making it look good. Real hair falls into peoples mouths, in front of their faces, and gets into weird positions constantly. More so if you were to perform the sort of fast motions game character do. Offline animation has a lot of artis trickery and correction going on to 'fix-up' their hair and cloth sims. You can't do that in real time. So the problem really is developing a bunch of artificial constraints and procedural systems to keep hair from doing weird things, while still alowing it to move perceptually realistic. That's not so trivial.