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A lot of the costs to produce a book come from the labor involved in writing, editing, proofreading, and formatting, as well as sometimes advertising. I don't think publishers save as much money as many people think with ebooks.
Admittedly, I wouldn't really pay more than $12 or so for an ebook even though I've paid $25 for hardcovers in the past. But I think ebook prices are reasonable in general, as long as they don't cost more than the print edition - especially for newly released books, where the hardcover price is usually much higher. I don't think it would be practical to demand that all books are 99 cents.
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