They work better. Pure and simple.
It's both the materials (higher grade cotton, waaaaay more expensive...the way the threads are spun is different, way more expensive...and the weave will be different...which is more costly and time consuming to make). Two towels, can BOTH be Egyptian or Aegean cotton, but they will be different grades of cotton, different thread technique, and different weave technique.
I have $80 towels (each one is 80 bucks).
I go to my mum's house and her $10 towels PISS me off. It's like the stupid things *repel* water instead of absorbing it. And they leave fuzzies. And I need 2-3 of them. And they are just annoying, pure and simple.
Why do I buy $80 towels? Because I used a friend's expensive towels many, many years ago and had the same "WHAT?!?" experience you just had.
Mine aren't Ralph Lauren. What they are, is really, really good towels. That are on their 9th year looking, feeling, and acting brand new. Getting washed 3 times a week sometimes (my husband KEEPS dropping them on the floor. by. the. toilet. Eeeew! Gross!! Not gonna change. I've given up. Any I find on the floor by the toilet go to the wash, although I wash "all" towels once a week, plain fact is that they're often on round 3 by that time)
Mine are 2ply (yes, towels can be woven single or double ply, but it's not like toilet paper with two sheets, it's *double the fabric* but they're woven together as a single sheet), 100% Aegean, ringspun, woven in Turkey, sold out of a London distributor (hint, the brits have faaaar more guidelines on fabrics than we do). LuxeSpa that either Bed Bath & Beyond or Linnens&Things carry as their top of the line towel.