There might also be some environmental regulations. Scrapping is dirty business and the whole world is watching, so the Italian Government doesn't want any bad publicity. And after all, isn't it Costa who pays everything?
Regarding the costs, keep in mind that this kind of operation has never been done in this scale. Sometimes things have to be thought of as the process goes on, and that tends to be expensive. Of course, doubling to 500 million euro is pretty steep, but then again, Costa pays...