Yes, the point here: the actual non-monetary "cost" of a purchase to many end users is much higher than 99c. I would say personally that the cost of any app I have to purchase is $2-3 at least. Therefore all that pricing the app at 99c has done is brought the cost down to the floor imposed by other factors.
So app developers need to judge and price their apps comensurate with the real "effective" cost the user is going to pay anyway to install their app. Pricing less than that, or at least deluding yourself that pricing less than that gives you a competitive advantage, is pointless and sometimes counterproductive (in the absence of other information I will judge the quality of your app partly by how it is priced).
You're understating the personal cost of a purchase by a couple of orders of magnitude. How much time does it take for you to make an assessment of product quality? What's the cost of your time? What are the available alternatives (where "failure to purchase" is in fact an option, and the default mode)?
So app developers need to judge and price their apps comensurate with the real "effective" cost the user is going to pay anyway to install their app. Pricing less than that, or at least deluding yourself that pricing less than that gives you a competitive advantage, is pointless and sometimes counterproductive (in the absence of other information I will judge the quality of your app partly by how it is priced).