Yes, it's ridiculous, because it's misleading!
Macmillan pushed for an increase on the MAXIMUM price of an ebook to $14.99, for ebooks that were released at the same time as the hardbacks selling for $27.99 in the shops. They also said they wanted to see the price of an ebook fall over the lifetime of a book, just like they do for "real" books.
E.g. a new hardback lists at $27.99, after a while at trade paperback comes out at $14.99, then a mass market paperback at $7.99 and then it drops further ... and why?
PRODUCTION COSTS ARE NOT HOW MUCH IT COSTS TO PRINT (duh!)
Let's start with the next J.K.Rowling ... she writes a book and sends it off to a publisher ... where it joins thousands of other submitted manuscripts written by other people ... many of which are terrible, and some of which could be good with a little work.
So there's an office address to pay for already.
Then you have to pay someone to read through the slush pile trying to figure out what's worth publishing, what *might* be worth publishing and what isn't ... and often (still) you have to send back the unselected works to their authors so they can send them to the next publisher. For a major publisher, this will be several people, all of whom need salaries, health plans etc.
So you find a manuscript that has potential, and an editor reviews it to see whether they think there will be a market for it (editors need to eat too, so we'll have to pay the editor, and some more office space for them to sit in), and the editor decides to email the author and say "yes, we're interested, but it will need a little work" (that's one of the editors jobs you know) ... and at the same time a contract will need to be negotiated, and that requires paying someone with a law degree to draft a basic contract (so a one-off cost, probably quite high) and then if the author wants any variation in terms, more legal costs (again not cheap).
So the author rewrites the book, and it is then copyedited, proof read (two more people to pay), an artist is hired to do a cover (maybe covers are not so important for books that are *only* ebooks, but we'll look at that in a moment), marketing gets the book into the next catalog and distributes the catalog to bookstores, and sets up a website for the book/author (or at least a page) which again takes people, so salaries.
And if your author is lucky, they get an advance (big authors, big advances!)
And now, if it's a paperbook (like a hardback) it gets printed and bound and distributed (and a bunch of free copies get sent to reviewers and review sites)
And then, if it is like many books published, it doesn't sell out that print run and the left overs are remaindered to shops that sell copies at a couple of dollars each.
For a small press, it is estimated that the cost (before advance and printing) to produce a book is somewhere in the $10,000-$20,000 range.
J.K.Rowling's first Harry Potter book had a print run of 500 hardbacks. If they didn't sell or get a positive response, then even if all of them sold, the production cost (before printing, authors royalties or distribution) would be between $20 and $40 each ... and lots of authors have written stories about children and magic before and not had her success (Diana Wynn Jones, Diane Duane, many more) ... so each time a publisher buys a book, they are taking the risk that they are going to lose a chunk of money on it.
So you can see why a new hardback goes for $27.99, the publishers are hoping to sell enough to make back some of the costs of *that* book and prove there is a market for the paperback ... and if they make a good amount on the paperback, then that helps cover the costs of all the other books they put out that didn't catch people at the right time (the "sparkly teen vampire" books that came out ten years ago or that are being submitted now, probably won't ever have the sales that the Twilight books have)
Macmillan offered Amazon either the option of having the *new* (hardback equivalent) books at $14.99 *now* (with the price dropping over the months ahead), or having them at $9.99 but waiting until the "real" hardbacks had been out for a few months ....
... Amazon instead pulled all the Macmillan/Tor/etc. titles from their nearly monopolistic online bookstore.
If each ebook version of a hardback kills one actual hardback sale, then since the author and the publisher get a percentage of the sale price, each of them gets less. This means ebooks would need to sell maybe twice as many copies ... and at the moment there just isn't the market out there buying ebooks. One author I've seen offered one of his books free, and for a small price, and still only got 10% of the sales/downloads that his paper books got.
If MacMillan accepted that $9.99 price, they would not have the money to risk on new authors so, as Teresa Neilsen Hayden said, the supply of well-edited, selected quality books that were at all risky or different would dry up, and you'd have to spend your own time downloading the 90% of self-published books that are rubbish to find the 10% that are not, and then rely on those authors to have friends willing to spend their time proof reading and copyediting etc. for free.
And the biggest point is, if you don't want to spend $14.99 on a new hardback-equivalent release of a book, then DON'T! Wait for six months or a year and get it cheaper. I can buy cheap Harry Potter books now rather than paying the full hardback price, especially since I can buy them second hand ... oh wait, Amazon doesn't want you to be able to do that with books they sell for Kindle, I guess that explains why I won't be buying any ebooks from Amazon any time soon!