Now, as to what an actually reasonable price is for an ebook... that's an interesting question (and of course there's no one solid answer, because different types of book will command different prices). For your typical mass-market fiction novel of ~300-400 pages, the kind of thing that would be maybe $8 as a paperback at a bookstore, something around $3-$5
Yes, I price the e-book versions of my books between $3 and $4 for essentially that reason. I do feel guilty that the various e-book "standards" don't allow for anything remotely resembling decent typesetting, so people who read my books on electronic devices are having a definitely less-than-optimal experience. On the other hand, I go to great lengths to ensure that one doesn't see (as I have seen with e-books from big publishing houses) howlers such as the word "you" presented as "y-" "ou".
I believe that the way e-books *should* have been done is to compile TeX on the fly. That way gorgeous output could have been presented on all devices. Frankly, I wouldn't take e-books seriously at all were it not for the undeniable fact that these days the bulk of my sales occur in that medium. I think my view of e-books is decidedly colored by how poor they have turned out to be (as a reading experience) compared to what they could have been.
If anyone cares, I am: http://www.sff.net/people/N7DR.