Sure, sell your app for $9.99 if you want. But it'd better be worth it.
And almost all of the apps ON the app store are little quick pieces of fluff, barely even worth 99 cents.
Even the better pieces of software are mostly timesavers or memory aids, games notwithstanding.
The problem seems to stem from the fact that there is this expection to spend a few weeks and crank out an app, then live on it for a year, when I just don't think this could be the case.
iPhone apps just aren't as big or useful as desktop apps. I'm not saying there aren't useful apps, but come on, you're not gonna see Photoshop or Visual Studio or.. World or Warcraft for the iPhone any time soon.
And this doesn't even get into the fact that a lot of apps I could use can be replicated just by opening the browser and going to a website. And that one app I WOULD buy, I can't, without jailbreaking. (Ah, Podcaster. C'est la vie. And that app is only 4.99 too.)