I don't think a $49 price point is "well out of reach" for consumer and hobbyist users.
Also keep in mind that the current price point is "introductory" and will increase in the future.
It sure looks like its well made, but take a look at the end of it and explain to me how writing/drawing with it isn't going to be a horrible experience?
This is an irrelevant question, because most iPad owners would not spend even a single dollar on a stylus. A better question to ask is what percentage of iPad owners would spend, say, $20 on a stylus but not $50? I suspect that the $20 to $50 jump is not that large for most people who are actually willing to pay for a stylus.