I think Sony's pricing for the 700 is fine. Think about it...the 505 retails for $299. Add to that the integrated lightwedge/cover, at $65 + tax, and you're up to ~$370, which is only $29 less than the 700, and you get the added benefit of the touchscreen, if you view that as an asset, as well as the integrated frontlight.
I'm not interested in upgrading because I can't justify the extra $100 for the way I use my 505 reader (see my other posts), but for someone new to the ebook reader market, I think it's very competitive with the pricing for other devices.
Getting a low-priced (sub-$100) reader is a pipe dream for now, I think...the cost of producing the eInk technology is just too high, and I don't think Sony (or Amazon, or other reader manufacturers) can anticipate enough ebook sales volume to sell these devices as loss leaders.
Just my $.02
