I've been for a day trip and yes it is expensive. My impression was that it was all a bit 'Yacht Club'. Spanish St Tropez sounds about right.
I'd say that restaurants cost at least twice the typical price in other resorts. In Spain, Balerics etc I expect to pay about 9 Euro for Menu del Dia (2 or 3 course set lunch with a drink) and 2-4 Euro for a tapa.
I think that Menu del Dia was 15-20 Euro and tapas were 6-9 euro each. But we generally go to the places that normal Spaniards go to and we also found Puerto Soller and Puerto Pollensa a bit expensive but not as much as Port Andrax.
We had been to Andrax town because we had read about it in Peter Kerr's excellent books about living in Mallorca and the plan was then to go there for lunch before heading back to Palma, where we were staying.
However, we were dressed very casually and didn't want to pay the high prices, so we had a quick drink and moved on. We are very glad that we did because it was then that we discovered Peguera, which is a lovely resort just to the west of Santa Ponsa. It has 3 nice beaches and lots of reasonably priced restaurants and bars.
We liked it so much the next time we went back, we stayed a week in Peguera, which is a resort where most of the holidaymakers are German, so everything is in German and Spanish rather than English and Spanish. But there was still loads of tapas and paella, as well as the lovely beach, so all was good.
Have you booked a holiday? I love Mallorca and need to go back, but it keeps falling down the list of places to go unfortunately.