I can see where it wouldn't be much of a problem if you only spent a couple of weeks on a very basic app. But once you get into the domain of polished, fully operational and genuinely fun games, you're looking at a turnaround of one to six months, sometimes longer. Selling it for $1 at that point is just unrealistic.
Yeah, but that's the thing, most of those apps aren't made in a couple of weeks, I thought.
In any case, the same thing ends of happening that has happened in the Casual Games PC market:
1. You make a hit game and spend 2 months on it.
2. Someone else clones your games and adds features to it. They spend 3 months on it and sell it at the same price (or cheaper).
3. You create the sequel. Because of the competition you have to spend 5 months and charge it even cheaper...
And on and on.
At the end of the day, it just seems like a no win situation in terms of a sustainable future (unless you can keep pumping out games)...
The alternative is to make solid (niche) games and sell them at a high price.