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I think there are a lot of faulty assumptions here. You are not relying on ONE reader to make all your sales. If you sell 10,000 books at $5 each, that's $50,000 right there---spend a year writing it and doing some solid self-marketing, and it's an attainable goal. Europe, USA and other, that's less than 3500 books per zone, which is below a typical 'print' run. $50,000 is an acceptable 'salary' for a year's work. I am a teacher and earn less than that.
Readers I know are not saying they don't want authors to have compensation and that everything should be free. The perceived value of an ebook is just not the same as the perceived value of a print book, and all of the complaining in the world about whether that's fair or good or whatever won't change that. iTunes has proven that people ARE willing to pay a fair price for stuff they can get for free if they look for it. It just has to be easy, and affordable.
As for what SHOULD be free, I would like to see most authors offering at least a sample chapter. If I can't pick it up in the store and see it, I should be able to do the same type of thing on-line and get a sample. I have bought ebooks on the strength of free samples before.
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