Just for the record: You don't just get a PDF. You get a real e-book too.
Well, sure, in the world where the only costs that sales price needed to cover were the marginal costs of the current copy, and not some share of the fixed costs of the content.
> Dead Tree books were heavily dependent on material and inventory costs
"Were"? Physical books are still around, you know. Also, those costs are partially marketing costs -- having the book printed and out on the shelf in a bookstore is a form of marketing. While they may not have the printing and inventory costs of physical books, ebooks definitely have marketing costs and, because of the low barriers to entry in the market compared to the market for physical books, arguably have more competing noise that their marketing is trying to be heard over. There's a cost of dealing with it, and the sales price of the books has to pay for it for selling the books to be a profitable business.
Meh, poor justification. A physical book is not really a form of marketing, there are tons of books sitting on bookshops shelves without ever being touched or opened by anyone. Only when you do an actual marketing campaign you get a prominent display with large amounts of your book in visible areas.
Ebooks have marketing costs but you can target the potential customer much more accurately online than in the shop. Plus, there are tons of mechanisms to get your book reviewed and rated by peers, to have a full site to explain the contents in way more details than you could ever expect in an actual store. Ebook advertising is probably not cheap, but it still is nowhere near justifying the large margin they create on the selling price.
It's a market ripe for disruption.
Copying ebooks cost no money at allSuppose publishers were to maintain profit margins and reduce prices by about 90%, as you suggest. I posit that their additional sales from lower prices wouldn't compensate for the profit margin drop because their books would hit market saturation first.