I'd argue the biggest difference is in the ease of installation. The big thing Apple has done is figure out how to take disparate software and make setup easy and automatic. That's were the support benefits come in. When selling software for Windows, Mac, or even Palm you spent most of your support budget just helping people install it.
Beyond that, however, the economics of the app store certainly aren't better than what we traditionally had. There are literally thousands of 'small apps' that have been sold for as long as the internet has existed. The various MP3 players (like winamp) spring to mind immediately.
The only difference with the app-store is that discoverability is a whole lot harder and the downward pricing pressure has meant that traditional advertising works pretty poorly (it's hard to buy traffic when your conversion is $1).