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They probably meant 170k gold in-game
Also what they haven’t said is that the price is set by players of the game,. When someone buys a WoW token and exchanges it for gold, that’s because a player has paid them with gold they earned for the token. These tokens can be then used to pay for your monthly subscription.
You are correct. Token value is decided by players on the auction house, not Blizzard, though I’m sure someone will argue that they are capable of manipulating the AH and therefore they are driving it up
They are capable of it, but I don’t really see why they would. Making the tokens cost more gold would mean less people willing to buy them on the AH and therefore less people selling tokens. I think the prices have just exploded because of the mount releasing. As someone else mentioned on here, I believe Blizzard just sets a minimum price for tokens.