Think about the pricing of HDMI cables. You and I both know you can pick them up on Amazon for $7. But Best Buy charges $50. There is no real difference.
Why doesn't Best Buy charge $10 or something like that? They are literally ripping people off.
Let's say that the cost to Best Buy is $5. If they charge $10, they make $5 each. If they sell it for $50, they make $45 each.
Obviously a lot of people will just order it online. But when you are making 9x the profit for each one, you can lose 80% of the people and still come out ahead.
So they can make albums cost $2 and hopefully capture 100% of all people, or they continue charge $10 and lose some people. Again, as long as they're not losing 80% of people, they are coming out ahead. And I'm not convinced that at $2 you would get 100% of people.