Yes they over charge for everything, because there are a ton of people who'll spend 3x as much just to say they got it from a mom & pop local place. Subway has 6 different types of breads and can make dozens of different sandwiches. The M&P might have 2-3 types of bread if you're lucky and usually only offer a few sandwiches. I paid $9 for a pastrami from a M&P, it came on a roll that looked and tasted exactly like the rolls I buy in a bag at Vons. It was worth about $4 tops but they get away with charging over twice that because idiots think the sandwich is somehow magically better due to where it came from.
The idea that mom and pop places bake their own breads from scratch and have a butcher shop in the back make me laugh. While there are some here and there that are better, as a whole most suck, and most are very expensive. I've paid $13 for a foot long that was craptastic. Subway isn't the best, but it's the best for $5 easily.