Even so, that's a huge difference compared to the previous $50-60 people were paying for games. Sure they can cut out the publisher, printing, etc... now, but I expect they were still making at least $10 per game in the past.
An equivalent game for PC (say a Telltale Games Sam & Max episode) costs U$ 9. The Sims 3 costs U$ 19.
You're comparing the adventure games to the massively expensive FPS or RPG or other stuff with awesome graphics and all that :) .
And, to be honest, I never paid U$ 50 for any game upfront (PC, console, boardgame, anything), and I believe 99.9% of the gaming population in my country (Uruguay) hasn't either :) . That's the realm of US and European teens that can afford them (well, their parents can).
I did buy secondhand console games and other stuff :) , and I've paid far more for my M:TG collection, but on 4 to 10 dollar installments :) .
After that, I think that some marketing could convince the vast majority to pay a lot more than 99 cents (I did, for Plants vs Zombies).
I'd pay somewhere around U$ 5 per game myself :)