Yes Venice can be very expensive for the casual tourist ! If you stay, eat and drink around San Marco or Rialto, it can be very-very expensive. And sometimes what you eat and drink is of low quality also.
What you should do is (try to) avoid tourist areas like Piazza San Marco and Rialto bridge area to drink and eat. There are excellent restaurants and coffee shops in all other areas of Venice, like Dorsoduro for example. Dorsoduro is populated by students and you can eat and drink at low prices. Some nightlife also, and i think this is the only area in Venice that stays live at night.
Transportation is something very expensive in Venice. A single Vaporetto ticket costs 6.5 euros for example. You can get a 1-2-3 days discount card, but still very expensive. Museums and other attractions are reasonably priced, i think. Some even totally free.