Cost of living has a lot to do with pay scale. Your 10k a year in mo town is probably more useful than our 20k a year in the SF bay area. 10 years ago my rent was 750 a month with 2 bedroom and a living room split among 3 in an apartment full of mold and 20 year old carpet, now it is more like 1k+ a month in a college town.
Professors are allowed to spend only 35% of their time to teach, the rest of them are to do research to make money for the school. Those famous prof never do research, they go out to market research opportunities to the government, private industry, etc, and let the grad students do all the work.