Security for the Olympics is indeed more expensive than security for 1 venue for the NBA Finals. It's not complicated. Marathon security is extremely expensive.
Please explain what you mean by saying "the vast majority of the security work would be done as soon as Olympic travelers step foot on American soil." You think that most of the security expenses would be spent on airport security at LAX for arrivals?
The Olympics has been a big target for terrorism and has attracted terrorism, including murder of Olympic athletes in the past. There is a reason why they are quoting a high security budget. You think that the San Bernardino Department of Public Health would have the same security as a bunch of sporting events? As I said, it is really expensive to provide security for 1 marathon, let alone 8 marathons.
The Super Bowl cost $4.8 million for security costs for one event:
http://www.sfbos.org/Modules/ShowDocument.aspx?documentid=54799