Features, to some degree, and margins, mostly. The manufacturers make higher percentage margins on the higher priced models just like car manufacturers make higher margins on SUV's than they do on economy sedans.
The main purpose of the receiver is to decode digital audio and power the speakers. In general, you won't find much difference in the way the various models do this. If you use a powered subwoofer, almost any size amp will drive the speakers in a typical living room sized home theater. If you don't then the rules are slightly different.
Personally, I view the receiver as fairly trivial in my system. Speakers (including subwoofer) and TV set are what matter most to me. Even these things are less important than the acoustics of the room.
As soon as I can buy a receiver with 4 HDMI inputs for under $500, I'll upgrade what I have. That would make automation a little nicer. Otherwise I could care less.