E-book pricing

E-book pricing article at NYT

What most authors dont seem to realise is that there isn't really any "real" price a book which is based on what it costs to produce a book. The only "real" price is that which a consumer will pay for the book.
So if a consumer will not pay more than $9.99 for a book, then that is what it will retail at - and to hell with what it took to produce the book. For example, take a painting. The only reason a Picasso is more expensive than a Thomas Kinkade is the paucity of Picasso paintings, and the willingness of customers to pay a certain price.

Here's an idea, sell e-books or paper books with advertisements every 10th page. Let the ads pay for the cost of the book, and sell the book at a cheaper rate. I probably need to digest the ads in books a little more. Any opinions?