I feel $10 is right.
Although I may have been conditioned by the $9.99 pricing but also because that is the discounted/sale price for most trade paperbacks and what I paid before e-books. Part of the reason I justified buying an ebook reader was because books wouldn't cost me more (I had long held off buying an ebook reader earlier because of prices I saw in the Sony bookstore).
I also have this rule of thumb that even if its below $10, the ebook must also be at least $1.00 cheaper than the current sale price of buying it new in paper. Because I can't pass it on (which I do with my paper books).
Sadly, I am buying a lot more paper lately