Think of something leaving the ground and not stopping where you expected. A price climbs, and climbs, until you look up and it is all the way at the sky. That is the whole picture, and the word simply puts sky and high together to give it to you. It works for anything a person can measure with their feelings: rent, ticket prices, confidence, hopes, sometimes the height of a pair of heels. And when the expression blow something sky-high is used, the same upward picture is taken literally - the thing does not merely break, it goes up.