Look, I don't think $1-2 price point is the price of gaming. But I think if people get in the mindset that GAMES SHOULD BE CHEAPER, that is not a bad thing for the industry.
$60 is too much for a game. I play most $60 games I buy for a week and then never touch them again. Don't even get me started on paying for imports between Japan's ridiculous overpriced software prices + import charges + current horrible exchange rate.
You want to know why the used game market thrives so well and endangers the game industry so badly? There's at least part of your answer. It's the reason why used dvds/blu-rays don't have the same industry-killing affect as used games. Dvds/blu-rays are priced at least SOMEWHAT reasonable and people don't mind impulse purchasing them and then don't feel inclined to sell them off.
IMO the game industry would do fine if everyone went to a $30 price point for console games, $20 for handheld games and $1-10 for DD indie games. I don't mean MSRP, I mean the prices should be around that level on Amazon/Best Buy/Gamestop/Etc..... I feel pretty confident that if all games were $20-30 they'd sell 2x+ amount to make the same profits to support the same budgets. But the problem is that unless EVERYONE goes into the lower price point together, a few games being a lower price point just makes them seem like budget titles and then everyone ignores them thinking they're stinkers. And since I don't see any collective industry teamwork to attempt a lower price point on a new generation ever happening, instead videogames in the US will probably just go the same route as the otaku anime market in Japan where the userbase shrinks and they raise prices to compensate for fewer sales and the userbase shrinks and they raise prices to compensate for fewer sales and eventually the whole thing just collapses (this is going to happen to the anime market in Japan within the next 10-15 years).
So if the app store and it's cheaper games brings enough public demand for LOWER PRICES that it causes developers to start dropping their prices of at least handheld titles to more reasonable price points like $20-30 instead of $40-50 for 3DS/PSP2 then, yes, this is a good thing for the industry and not a bad one.
You know what you do if you're the collective publishers? If you're so afraid that cutting your game prices in half won't bring in 2x sales and will cause you to go out of business due to game budgets, then why don't you start out buy cutting all your game budgets in 1/2 and selling your games at half the price? Then see how it goes for a while. If you're selling far more copies, then you start raising your budgets so that you can bring out higher quality products within the lower price point while still bringing in profits.
If the entire game industry tried that and we had a few year BUDGET TRANSITION where we went to lower budget games on $20-30 price points, I really believe the game market could thrive and the budgets could start getting back to modern day budgets without raising game prices. But companies need to work together to do this. Or Nintendo/Sony needs to put out a handheld and set a max price point of $20-30 for handheld titles.
/end bebpo rant