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In comparison to a pBook, an eBook provides you less and so should cost less. That's the common feeling and one reason why they haven't taken off.
1) It's incomplete: you need some sort of reading device, which costs money.
2) No collectible value: there's no way to have a shelf of first edition eBooks.
3) No resale value: because it's not tangible, you can't take it to the used bookstore when you're done with it and trade it in for credit on a new one.
4) Possible DRM restrictions: if you bought a DRMed eBook you have limits on what you can read it on, possibly when and how you can read it. You can't read it and pass it on either. Everyone has to buy their own copy, they can't share.
There are advantages to eBooks as well, but people will often look at the disadvantages first, then the advantages.
From what I've seen on both Webscriptions and Fictionwise, the sweet spot for price seems to be between four and six US dollars for an eBook. That's the price at which a single unencumbered eBook sells. Fictionwise makes no bones about the fact that it's their multi-format books (the DRM-free ones) that keep them afloat, and that's their normal price range.
It's not free-- it's about 50-75% of the cost of a paperback in the US for a book that can be downloaded in multiple formats and read on any device of the purchaser's choosing.
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