>>Amazon wants authors to price their ebooks at $0.99, so many do, and these are the ones that are sold
Its not AMAZON that wants authors to price their ebooks at $.99 - its Amazon's CUSTOMERS who want that.
Take me for example. I'll take a $.99 flyer on an unknown author with an intriguing plot summary. My current modus operandi is to buy books from 5-10 authors at a time, take my time enjoying the ones that are actually readable, and then come back for more. If I was paying more than $3 a book, I'd be considerably more careful regarding what and how often I was buying. Also, getting burnt by too great a percentage of not-ready-for-primetime authors would, without a doubt, stifle this habit, dim my general regard for Amazon, and probably send me back to browsing inventory in book stores.