There is a flaw in the original argument that everyone is ok paying $4 for a cup of coffee. I think the products are too different in target audience, demographics, and tangibility. I think a similar product with a broader reach could have been found.
Having said that, I suspect there is some truth to the argument, but I also suspect a contributing factor may be a feeling of a "lack of ownership". Do you really feel like you "own" it, or do you feel like you have $1 worth of lease time on it? Especially with the ability to remove apps after downloading them.
One thing I would suggest, is that consumers as a whole have taken that feeling of ownership into account on some level when deciding how much they're willing to pay for pure data as a product. I am much more willing to spend $15 dollars to own a physical piece of a medium than I ever would for a digital copy of say a movie. This is the primary reason I subscribe to netflix streaming and still buy physical DVD's but have never bought a digital copy of a DVD from a service like iTunes. Even if I'm only licensing the item, I still have a tangible product and that tangibility goes a long way with the human psyche.
I can theoretically stream 30 movies a month from Netflix for my $8 bringing the cost of the movie down to ~$.27 each. I think that would be a better comparison for the $1 apps. I have about the same feeling of "ownership" over the product.