I'd say that this is perfectly fair (as long as everybody pays the same), and it's a problem for the creator of the $1 app to sort out. The patent owner is explicitly disallowing the usage of his patent in low-value products, but there isn't anything wrong with this. Either somebody will make a killing selling a $5 app with it, or nobody will care about his standard. (Relatedly, you don't have a right to get the costs of your app to adjust around any price you want.)
What is definitively not fair:
1 - Changing the price between licensees;
2 - Varying the price with product price, revenue, or any other metric;
3 - Embedding the license with any term that isn't payment from one side, license from the other.