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Some time ago I picked up a book, The Second Mate's Cup of Tea. (currently 0.99 at B&N, and $2.99 at Amazon). When I picked it up, it was labeled a short story. What it is, is a short-short. I wasn't expecting a novella, but I was expecting more than a couple of pages. It's cute, but even 0.99 is probably too much for what it is.
On the other hand, I think expectations for paying for indy books is changing. I have a 25+ page collection of short stories that I want to sell (when I'm finished with them), and I've been told at the writer's corner here that 0.99 may even be seen as over charging for the collection.
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