After research it is literally only margin. They're selling an intangible product that has theoretically no cost of production. But it's their beautiful software, so they have the right to charge whatever they want for it.
Upfront there's quite a bit of cost. There are the countless hours for the software engineer to log, tweak, & test, there's the cost of the chassis and/or engine dyno, the cost of test cars and other measurement equipment.
This late in the product cycle, though, one would have to think their ROI on that investment is essentially complete, at least on a top-selling platform like the Gen 1 TSI. At this point, you're right, there really is no/minimal incremental cost to selling their software to a new user.