I have used a number of the igaging type inexpensive DROs (3 on the mill, 3 on the lathe, one on my drillpress). Here is why I think they are less expensive than the glass-slide type:
1) They don't have as much resolution capability. Many of the glass slide type DROs are capable of 0.0001" resolution while the igaging type are 0.0005" at best
2) They are much more susceptible to dirt and grit. See below.
3) The have a little backlash.
4) Better/faster electronics. Typically the more expensive units read very fast, while the igaging type read at a much slower rate, which sometimes slows one down in making a precise move.
Backlash: I have one of these digital scales on my 7x12 lathe cross-slide. I modified the cross slide to increase the travel, and I also changed the leadscrew nut to an anti-backlash design. In testing, I had the backlash down to about 0.001", but couldn't get it lower - it should have been almost zero. I was tearing my hair out until I put a dial test indicator on the slide and saw that the slide itself did in fact have immeasurably small backlash, and what I was seeing was the backlash in the digital scale. So users should be aware that there is a little, and if that's important to always approach a critical measurement from the same direction that the scale was zeroed. I don't know, but I suspect the more expensive readouts don't suffer from this.
Dirt: I can say from personal experience that fluids and grit will screw up these inexpensive units fairly quickly. When they get dirty, their behavior is very erratic to the point of being useless. I was able to restore two of them to proper operation by disassembling the sensor slide, cleaning with alcohol or electronic pcb flux remover, and them blowing them dry and blowing out any remaining debris with compressed air. Also the slide itself must be cleaned thoroughly. On my mill X scale and the lathe carriage position scale, I've now added covers over the scales, and that has helped a lot. The covers are basically the ones in the G0704 DRO mod shown at MadModder:
http://madmodder.net/index.php?topic=6512.0 and they do a great job of keeping oil and grit and chips off of the scales.
Having said all that, the inexpensive units are a great value, and I can't imagine working without them.
bix