Another fantastic article on self-publishing by the inestimable David Gaughran. Among many good points, he notes that common indie eBook prices of $2.99-$4.99, far from being unprecedentedly low, are, adjusted for inflation, in line with historical prices for paperbacks prior to their inflation in recent decades by the big traditional publishers.
I add that said inflation occurred in an era when more and more layers of gatekeepers inserted themselves between authors and readers. For example, agents, now nearly mandatory for traditionally published authors, only became common in the 1970s and 1980s. For decades, the publishing industry for any number of poor reasons restricted supply and increased prices.
In short, they dropped the torch, and indies and self-publishers have picked it back up.