There's been much talk in the industry regarding the pricing of ebooks, as recently as yesterday over at Nathan Bransford's blog. The industry as a whole still hasn't settled down to a pricing structure for ebooks.
The Big Six have more or less all ascribed to the agency model, wherein the publisher sets the pricing, usually between $10.99 and $14.99. Amazon.com had been setting prices at $9.99. Indie authors (however you want to use the term) have prices starting at free and moving up from there to prices comparable with the Big Six.
Personally, I think $0.99 is too low for a novel, but it's a great price for a short story. I also think more than $10 is too high for most books: I grew up in an era where mass-market paperbacks were $3.99, and that's sort of stuck in my head as the baseline price for a book. (I'm not only dating myself here, I'm also showing the fact I do a lot of book shopping at the half-price stores, which is about the only place you can find a paperback for less than $5 anymore.)
I recently found a non-fiction book I was interested in purchasing because my library doesn't have a copy. I looked it up on Amazon, and it was $16.49 for the paperback, discounted from $24.99. The Kindle edition was $14.74. I don't have a Kindle, but I do have a Nook, so I popped over to B&N where it was selling for $16.82 print, and $14.99 Nookbook.
Now, I like my Nook a lot, but I hate not being able to flip through it, especially with reference books like the one I was contemplating. However, I also hate paying shipping. So my options were: drive to my local B&N and probably have to pay list price; buy it online and either have to pay shipping or find another book to add to my order that I wasn't planning on buying (and would probably blow my book-buying budget for the month [yes, I have to budget for that]); or buy the ebook version, which I could get right now without having to pay shipping or full price or even leave my freaking chair, but then I wouldn't be able to flip through from bit to bit as I like to do with reference books.
I didn't buy the book.
Now, if the ebook version had been significantly cheaper than the print version, I probably would've downloaded it and just dealt with the search function. However, with only a couple of dollars difference between the ebook and online pricing, it just doesn't make sense to me to buy the ebook. And since I'm not planning on placing an order in the next couple of weeks, and I have the $17 price point stuck in my head from looking at the websites and don't feel like paying full price, I just added the book to the long list of "books I want to get eventually."
Some people prefer ebook to print, and for them the book might be worth $15, but I still prefer print. I have a really hard time paying $15 for a digital book. However, what really killed this sale was the online discounting of the physical book. Other than a selfless desire to support my local brick-and-mortar chain store (which still employs local people), I'd feel like an idiot paying $24.99 for something I can get for less than $17. Hell, even paying shipping, it would still be cheaper to buy online. But if I looked online and saw a price closer to list, I would either have bought the ebook which would now be closer to $10 off, or I would've driven out to the local store if I really wanted a print copy, because driving out to buy it would be cheaper and much faster than getting it online.
In economic times like these, when feeling like a smart shopper is so key to many people's buying decisions, I think the industry has more to worry about than just the pricing on ebooks.