Hi Sal, I've got a place on LBI - in North Beach, bay side.
There are a number of reasons why Ship Bottom prices may be lower than others. First, Ship Bottom is one of the wider sections of the island and so it is possible that the properties are further away from the water - either ocean or bay - than in other areas of the island. Also, there is a good bit of commercial development in Ship Bottom. Also, some major roads running in parallel to the Boulevard. Property sizes are smaller than in some areas as well. As an example, in North Beach many parcels are 100 x 100 - that's tough to find in Ship Bottom I think. Incidentally, when you first cross the cause way and enter the island, you are in Ship Bottom.
There is nothing like LBI - and if you have an opportunity to buy on the island, I can't imagine you can go wrong.
Let me know if I can help you in any way.
Maybe I'll see you on the Beach!