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A sample can RAISE the price I'm willing to pay for a book, but it can also LOWER it - often even to zero, so that I don't buy it at all. So, in that case, why take the risk and offer a sample at all? The answer is simple - for a new author (new to me, at least), I almost never buy a book without a sample.
However, the length of the sample, beyond a chapter or so, isn't going to change the price I'm willing to pay at all. I agree with rhadin above that all I'm really looking for is a quick check that the author writes in a style I like and uses decent grammar so I don't get distracted while reading, and that the e-book is reasonably well made without a lot of typos or messed up paragraphs to annoy me. So, OP's author's theory of "long sample = gotta buy the book even at a lot higher price" doesn't work for me.
And general theory aside, I agree with a fair number of folks on this thread that $7.99 is a lot for a new author on an indie book site. I probably wouldn't even look at the sample unless something about the synopsis were unusually compelling.
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