However, "selling dirt cheap" isn't always the way to go. Most companies think: "You get what you pay for" and that may be a mistake on your partner's part. Underpricing a product might seem great in order to beat the competition, but when it comes to companies and profitability: they want results and profits. They don't care how much it costs to get that. They will pay tens of thousands of dollars to have software that is reliable and suits their exact needs. When the client lets you know they expect to be paying more: it usually means they are going to probably have some demands for customization. He wants the clients, but then they will likely ask for custom features or not be happy with something, and.. it may just be a never-ending story, and there is going to be a time where you both have to just say no.. and take the hits and negative reviews.
OR.. say yes, but it is best to charge enough to stay in business and even hire additional employees. I have undercharged clients before... many times and many mistakes.. and after a while, when is it no longer worth it? When will you just bite the bullet and take the hit because.. you didn't ask for enough money to be worth maintaining the project.
Even if your project doesn't see the light of day, but you have the source code, and it can be seen somewhere, I'm sure its not career suicide. What you have probably learned is more amazing and useful. BUT... he may be thinking smaller or just not reaching the right audience, and you may need to be the one to advise him of a different method, whether he wants to hear it or not. Both of you want the same thing: A Saas in which you are both making good money and developing software as a business.