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If you buy a lot of books (like most of us here do) you might take into account the average price you pay, rather than just the price of certain individual books.
I wouldn't want to pay $16.99 for every book I buy, I couldn't afford to. But since many of those ebooks I will get during special promotions at $0.99 or $2.99 or $4.99, I don't mind paying $16.99 for some. The average price I pay for a publisher's ebooks works out to be much less than their normal list price.
Contrast with paper books where there is no opportunity for such steep discounts, the average paper price ends up closer to the normal list price. So in practice ebooks are much cheaper in comparison to paper than the difference in list price alone would suggest.
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