As a former factory rep I think I may have some insight into the situation. While I was not in the golf business when it comes to consumer goods the dynamics are generally similar. My theory:
Costco gets a call from a ball manufacturer that says either, "we have a huge overrun or cancelled order of balls would you be interested at a stupid price?" or, "we have a ton of excess production and material ( the manufacturer probably has access to a crazy deal on the raw materials) we could make a product that would be comparable to the ProV1 and you could retail them at less than half the cost, would you be interested?"
My guess would be the latter because unused production is a big loser for a manufacturer that cannot be recouped. Making a "one off" private label ball would not hurt the manufacturer's existing product line or distribution channels. I think the fact that Costco apparently has no plans to offer the exact ball again suggests that the materials used to produce them aren't available at the same price as the first run.
Titleist is pissed because it made them look like they were gouging the public (duh) at $49 a dozen. Most of the time a cease and desist letter will throw enough of a scare into a small manufacturer or retailer to discontinue production. Costco is probably big enough and has legal staff on the payroll that such threats don't have much impact.
We used to do this kind of stuff all the time.
