These days, I feel like there are less tangible disadvantages to the 99c price point, other than the fact that you make less per sale. There's still the issue that users are willing to put more effort into a product they pay more for, and will even go to further lengths to defend it, because they want to justify their purchase and their taste.
On the App Store, it all comes down to perceived risk. If a user is unsure about an app, they probably won't spend much more than 99c because they don't want to overspend on a dud. Once a user sees an app in Apple's "featured list" or has used the lite version of that app, they'll be much more willing to splurge on a higher price, because they know what they're getting.
For Trainyard, I felt that there was no longer a big difference between the $1.99 and $2.99 price points, because by the time a user arrived at the purchasing page, they already knew they wanted it.
All that being said, there is a large contingent of users that seem to only buy apps at $0.99, but most of the time, your apps won't be visible to those users. The moment I reached the top 50, I knew I would have tons of that sort of user looking at Trainyard, so I did the price drop.