Is eBook Pricing Too High?

EBook pricing is an ongoing challenge. Amazon has set the standards at $9.99 but some publishers have set the price higher wanting to recoup some of the costs. But is this at the expense of book sales? Minotaur Books recently released One Man’s Paradise, the debut novel from author Douglas Corleone, and set the eBook price at $12.99.
The Kindle Nation blog argues that this is too high for an unknown author and will likely hold back sales. From Kindle Nation: “…his publisher Minotaur Books, an imprint of agency model participant MacMillan, may be killing off his career before it really starts by mandating a non-discountable ebook price of $11.99 for a debut novelist without a following.”
What should the price be? That is debatable. From Kindle Nation: “At $9.99, the Kindle edition of One Man’s Paradise would have a chance. At $7.99, there’s an excellent chance I and others would be raving about it and it would be in, at least, the top 1,000 in the Kindle Store sales rankings.”
What do you think is the right price?