The self-improvement market is very much like that. You could sell people a video of a Tony Robbins seminar for $20. But when people pay $1000 and devote a long weekend to it, they're more likely to change their behavior as a result. The $1000 product is actually worth more than the $20 product.
If you're going to spend 4 hours reading a book and your time is worth $100/hr, you can see that the price of the book itself is irrelevant.
All your grocery store ever does is extract money from people who aren't smart enough to find the right produce through their local farmer.
This is a new model of retail. Instead of creating a central box into which a hundred different products can be dumped, for a thousand different people, this site creates a single location for a single product, which a huge number of searchers will find. The fact that there is a Parrot Book, and that it's easy to find, is good for humanity. Not sure if the rewards are commensurate to the goodness, but if you average this in with a few hundred other sites using the same scheme with less success, you get a saner picture.
If working under a pseudonym is a "fraud" then a lot of great writers were frauds: Charles Dodgson, Samuel Clemens, Stephen King, Robert Heinlein, Isaac Asimov, a sizeable percentage of the artists who draw your newspaper's comic strips, and 100% of the authors of the Nancy Drew and Hardy Boys books, among others. Many musicians are "frauds" (Farrokh Bulsara, Robert Zimmermann, Reginald Dwight), including most famous rap musicians. Half of Hollywood is a a "fraud": Frances Gumm, Archibald Leach, Margarita Cansino, Marion Morrison, Allen Konigsberg, Carlos Estévez, Maurice Mickelwhite.
(Sorry about the flood of examples. I just can't resist them. Isn't it fun how much less bland the world looks if we just remove the whitewash? But, alas, I can't blame Marion Morrison for deciding that he'd sell more tickets as "John Wayne", because I don't doubt that fact for a minute.)
As we've seen, many pseudonyms were chosen precisely to hide the author's true race or gender from the buying public: George Sand, George Eliot. And there's an analogous practice: the creative use of initials. (Especially common for women trying to break in to SF/F. Isn't that interesting?) Thus, Joanne Rowling publishes as "J.K. Rowling" [2], Carolyn Cherry's 60-odd works of SF are published as "C.J. Cherryh" [3], and Celia Friedman writes as "C.S. Friedman".
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[1] I single out Middle America because it's the place I know -- I was born and raised in Ohio. I'm sure Middle America isn't the only place where this is true.
[2] Of course, this doesn't fool anyone anymore in her case.
[3] According to Wikipedia, the extra "h" is there because "Cherry" sounded too much like a romance novelist's name.
Yeah, that one would be a little harder to explain away. ;)
Creating a single location for a single product may be a new model of retail but selling a product with little value to a naive market is not.
EDIT: I just realized it's not a new model of retail at all. One person selling their wares predates the concept of retail stores and it's still alive today on streets and in markets.
Let us not forget Joe Ades: http://www.youtube.com/watch?v=2ia7TF2yVQU
William: "Ugh. I was really excited you’d found something that entrepreneurs could do to bring value to the world. But this guy’s taken the basics somebody could get from any $20 parrot book, added a heap of the sort of dubious marketing that fills the low-grade tabloids, thrown in a web forum they could get for free, and charged $80 for it. From an economic perspective — which is something we clearly could use more of — this business adds little or no value to the world. All it does is extract money from people who aren’t smart enough to find the right parrot book through Amazon or their local pet store. It moves money around, but it makes us net poorer, as it consumes more value than it creates. I’m sure it’s great for the guy running it, but don’t fool yourself into thinking this does anything good for our economy at all."
Mike Gamerland: "Following this model, you would suggest we all pick a niche market, identify ourselves as someone we are not, with experience and expertise we don’t have and sell products to people who, by the very nature of the market – would find it difficult if not impossible to know the truth... So - instead of identifying expertise and raising it above the clatter of the girl 'who would love to talk to me now' and the 'banker from Africa – who can make me millions,' I am stuck with more liars working to get money from me."