Turbotax online and the desktop program are different products with different capabilities and price structures. The Desktop version which includes one free state prep is available for direct purchase for $69.99. (Although note that state e-filing is $25 extra no matter where you buy it, but you can print and mail your state return for no extra charge.) It's against the law for Turbotax (or any other company) to set mandatory minimum prices for their products when offered through third party retailers. And Costco is a special case because they make 95% of their profit from membership fees, so they can afford to sell their products at or even below wholesale cost.
Turbotax Desktop version (CD or download) is a more powerful product, and is usually less expensive if you buy it from a discount retailer. I only recommend the online version for people who qualify to file for free.
Here's a slightly longer canned answer that explains some of the differences:
The cheapest way to use Turbotax is to buy the CD or download for Turbotax Deluxe from a discount retailer like Staples, Costco or Amazon, and install it on your computer. If you buy the Deluxe Federal + State + Efile edition, you can prepare as many returns as you want. You can e-file up to 5 (IRS limit) and then print and mail the rest. One free state is included. State e-filing is $25 extra for each state return, but if you prefer cost over speed, you can print and mail your state return for free. The desktop version also gives you full access to all forms and worksheets, including those that are hidden in the online version.
Deluxe (on the desktop only, not online) includes all the forms needed for investments and self-employment. The Premier and Home & Business versions have more help and advice, but if you know what you are doing, you can use Deluxe at lower cost. The only potential downside is that your tax file is not stored in Turbotax's cloud. This means that it is not hackable (good) but also means that you have the only copies. If your computer crashes and you don't have a backup, your file is gone.
Turbotax online is overpriced (in my opinion) and an inferior product. There is only one seller so they control the price. I only recommend online to people who qualify to file for free.
