Did UPS rates exponentially increase?
The answer is not the recent peak season surcharge, although UPS did implement those rates on Oct 26 (link for details).
The answer is your 1" package height.
eBay recently (finally) updated their programming for dimensions 1" or less on UPS packages. This was not being factored in before as it should have been, and sellers were facing unexpected cost adjustments for nonstandard packaging.
In short: this update is a good thing for sellers as eBay is automatically factoring the surcharges upfront so you won't be surprised with after the fact adjustments (just like they do for all other 'nonstandard' dimensions and weights).
On this eBay help page about package types (link), one of the factors in UPS irregular packaging surcharges is:
Is routed through UPS’s irregular package sortation process, including but not limited to packages 1 inch or less in height
When entering dummy dimensions into the eBay shipping calc you can see this in action:
12 x 10 x 1 dimensions & 1 lb weight from NY to LA via UPS Ground: $23.26
12 x 10 x 2 dimensions & 1 lb weight from NY to LA via UPS Ground: $8.54
You may say, "but I never got hit with a cost adjustment before!" That just means you got lucky and your packages weren't caught - or they were over 1" thick. You could have easily had your packages under 1" thick get caught and you would have been slammed with these big cost adjustments as other sellers have been.
UPS rounds up so you need the package to be at least 1.1" (UPS will rate that as 2") to avoid this surcharge.
Packages not exceeding 1" thickness are better off shipping USPS Ground Advantage.
Hope that helps.