The purpose for Amazon forcing publishers to charge $9.99 for e-books or sell none of their books on Amazon (e-book or hard copy) was to get Amazon a monopoly for the Kindle.
Well, I guess their monopoly didn’t exactly work since Barnes and Noble with their Nook among others also charge the same low ebook prices and do well.
They figured out that if you sell at a lower and reasonable price you make up the difference in sales volume, something I learned in econ 101. This is why many hardbound best sellers are only on the shelves at full price for a short time before they are deeply discounted and yet they still make money on them. With ebooks, their production costs are a small part of the cost of hardcover books. Apple and the publishers are making a bid to up their cut of the pie while incurring few additional costs.