Why are processing fees so high for gyms? Can these be negotiated?

The gyms are there to make money.  High fees mean they will still make
a bundle even if you quit after a month.  High fees may also make you
less likely to quit because you had to pay all those fees to join and
hate to see them "wasted".  Everything is negotiable.

I agree - everything can be negotiated. Speaking from experience, if
you are a working professional or student, I say check with your
school or company to see if they have any corporate/blanket contract
with local gyms. More often than not, they do. Typically they
contracts can mean lower monthly fees, waived initial processing fees,
zero contract contract, etc, etc. The benefits varies for each
company/school.

In a nutshell, it's easier to negotiate for lower fees/contract when
you are a member of a large group of people ie company/school.