The cost was not cheap either as you correctly point out. A simple proof is this: Are there more brick or cobblestone structures in cobblestone country? If you start carefully counting as you drive, anyone will quickly see that brick far outnumbers cobblestone during the period, and nobody pretends that brick is cheap. But it was in fact cheaper than cobblestone and I know why! Its a LOT faster to lay brick than to lay all those odd sizes of stone and tool all those joints PLUS the brick walls were 12 inches thick at the most- 3 bricks thick. But cobblestone had to be 18 to 22 inches thick or more. It cost a lot of time gathering all those stones in fields. The small cobbles did NOT have to be cleared from the fields anyways - only the larger backing stones. So lots of cobbles had to be gathered.
We think labor was cheap back then. False! There was more work to be done than people to do it all. A brick house requires about a tenth the mortar that a cobblestone house of identical size does. That's a disgusting amount of backbreaking work to mix by hand in all kinds of weather. It is demoralizing. At least a fourth of a cobblestone house is mortar- usually closer to a third. A 100 ton house (common) had to have say, 28 tons of mortar. Good luck with that using a hoe in your hand.
Now, did Europeans do the work? Well there were no doubt English immigrants working on them, but here's the big fact - 90% of the work requires no skill. Mix the mortar, pick up the big backing stone, hand it up the scaffold, build the scaffold, shovel the mortar onto the top of the stonework etc etc. Even laying the smaller face cobbles requires care - not a lot of prior skill. Only the final joint work requires prior skill and practice to do really well.
There were so many cobblestone foundations that are competent and even handsome that they can't be counted. Therefore plenty of local New Yorkers did them, even the final joint work. The English introduced it, but Americans very quickly took over. In fact locals who were masons already before cobblestone arrived could probably do the joint work at least in a rustic way having seen it done only once. Lots of cobblestone walls are indeed rustic in the early period and some in the later period too. I quite like much of it even though I could easily out perform their quality with my eyes half closed. It tells me they were locals who were semi-skilled at best. They probably had done glacial rubble house and barn foundations prior to the cobblestone era. Some of those are attractive and well done. They don't require uniform coursing. When I did the Ulysses Town Hall I did not have time to do refined joints and I went on autopilot with no time to go back over it much. I've seen that look all over New York. I've taught it to dozens of students and they could all do the basic rustic look after 12 or so hours of instruction.
The high cost at the end killed it [cobblestone construction] when the cobbles were smaller still and more refined at a time when bricks were being mass produced more and more and the price difference between the two became too much. Brick became cheaper, cobblestone more expensive.
By Paul Briggs of Ithaca, a very noted mason specializing in cobblestone restoration, from Richard Palmer email 9/24/2020.