Yes, eventually sales will slow down as the price becomes too much. But in the interim the pricing model creates a sense of urgency that is likely to increase sales now. With the site most likely being used to market and sell custom logos (in and for the log run) his current pricing model doesn't seem that bad. Not to mention the pricing model also has some baked in social proof... someone paid $xxx for one of his cookie cutter logos! "Someone else found it to be worth it, I won't be outlandishly foolish if I buy one too..."