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I come at this from two angles. First, as a consumer of indie books, and second, as a professional editor (of medical textbooks, not fiction).
As a consumer, I have become accustomed to the publishing houses, like Random House, being gatekeepers. Although I still see dreck from these publishers, it is not the worst of the dreck, which is available in the self-publishing market. In the not-so-long-ago-days of publishing, buying a book published by a Randomn House meant that it was edited and there were few grammar, spelling, and typographical errors -- not that it was error free, just that most errors were weeded out. Consequently, I was willing to pay $25 for a hardcover book (and am still willing to do do so).
Then came ebooks to the consuming masses and I joined the crowd. My first discovery was that an ebook from a Random House was absolutely no guarantee of editorial quality, especially if the ebook version was a scan of the pbook. Consequently, I was (and am) no longer willing to pay a high price for an ebook.
My second discovery was the world of self-publishing among indie authors. In the beginning, I was willing to spend $4.99 and even more for an ebook -- until I discovered that editorial quality was sorely lacking. If the Random House ebooks are riddled with errors, they often appear to be error-free compared to the self-published ebooks. And, unfortunately, there is no really good way to determine in advance of reading the indie book how well written and carefully edited it is.
My experience has now made me limit how much I will pay for an indie book from an author I have never read before. Occasionally, if someone I truest recommends a book, I will pay $2.99 for an indie ebook, but generally, I will not pay more than 99 cents. Once I have discovered a good indie author whose books are well written and edited, I am willing to pay more for subsequent ebooks by that author, but not for my initial introduction to the author.
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