I don't know - the underlying argument here, that developers need to avoid a race to the bottom isn't particularly new, new to Microsoft [0], or in my opinion convincing. This article seems like a strange mix of a Microsoft marketing piece, and a call for app developer collusion. In other industries it seems almost by definition that the worth of the product is what it's selling for -- .99 cents for most apps. Arguments along the lines of "surely apps are worth more because, c'mon look at the price of coffee," use only emotion based on how much work we see go into those as developers not the value provided to users. It's very easy to blame poor revenue as a marketplace problem rather than a product problem and it's this type of thinking that drives this conclusion rather than proper analysis.
A hit driven industry can be brutal but I'm not convinced that the app store is more of one than traditional software, social websites, marketplaces, and games all spring to mind as places where success is very hit driven. Even outside our industry: books, television, movies, music, fashion - these all all hit driven because that is what fits best with where the demand is.
* In the television industry most shows have both higher production costs and lower prices than software, does this mean this industry is broken?
* Increasingly for app store purchases with higher prices I hear about the apps from avenues other than the Apple featured list (ex drawing apps, higher priced games.) It seems that the marketing channel that is being provided for free is being mistaken for the only way to market.
Fundamentally as a developer if I want my app to sell for more money, I should make it bring more value to the customer, not hope for minimum pricing constraints on all apps. It's a great thing as a consumer that distribution and marketing channels like the app store have made it possible for me to use more software, and spend more money on software than I ever did on a pc.
[0] See minimum pricing of Xbox live games on both Xbox and Windows Phone