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I agree; I think the ebook price should be the lowest priced version, and a few bucks cheaper than the paperback. But they didn't like that answer, so I had to think about it.
My first impulse was to say $5, as that's a lot more reasonable than $10. But they wanted a more "brilliant" strategy, so they're looking for a product differentiator in the marketplace. So I picked $3; that's low enough to get noticed, without people thinking of inferior quality or a special deal that a $1 ebook might. And it seems to me that retailers and publishers should be able to make a small profit on a $3 ebook while still paying the author a good royalty. But if I say $3 and get $5, I'll be happy.
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