Most of my coffee shop experience has been in lower Manhattan, well after the publication date of the OP...but anecdotally, the premise seems sound to my biased mind. I never had any hesitation plunking $3-$4 for a iced coffee at Blue Bottle/Bluebird/MUD/Abraco (the best place in the East Village IMHO) because I would think to myself, "Well, it's about $2.50 in Starbucks, which is the Walmart of coffee"