I'm new here. I couldn't find an introduce yourself section anywhere so I think I'll just introduce myself here.
I'm Yasir from Jeddah, Saudi Arabia, I've been visiting this site for years and might have even signed up before (can't recall) but this is my first post.
About the Abraj al Bait Project, it isn't really about ego or making money. The complex is, as far as I know, a waqf project which means that it is is for charity. The complex is not owned by King Abdullah who's project it is nor will it be inherited by his children. Also any money made from it would go to charity. There's actually a long history of rulers of Muslims creating waqf endowments in Makkah.
About the location and the size, the rulers of this country were people who once lived hand to mouth in the desert and that made them extremely practical. Building a huge complex close to the Mosque was the most practical alternative in order to accommodate the increasingly large number of pilgrims who arrive every year.
And although the Hajj does stimulate the economy of the Hijaz region, just like it has for thousands of years, I doubt the government makes any money off the hajj. A lot of things are subsidized here, water and flour are two examples and these subsidized goods are consumed by the pilgrims, which costs the government. There are also no taxes on income so money earned by businesses doesn't directly affect the government accounts either.
I'll take pictures of the Abraj and put them up next time I go to makkah. :-)