Yeah, $130 does seem salty at first blush. But you have to step back and ask yourself what your time is worth: can you afford to spend hours making similar tools when your time would be better spent doing something else? One advantage to making your own though is in making custom shapes for specific applications.
Small custom woodworking tools can certainly be made out of any high carbon steel scraps. As stated, heat with a torch to anneal (soften), shape it to your heart's desire, give it an initial sharp edge, then re-heat treat by taking it to cherry red and quenching in oil. De-slag it and give it a final honing and go to work with it. Doing this with low carbon cheap steel and then carburizing (case hardening) with Kasenit or somesuch makes for a one time use tool, and often not even that- one or two sharpenings while in the course of a job and you will have worn through the hardened surface making the tool well nigh useless without re-carburizing it again (and again and again...).
