I agree that the original author's argument was no good. However, you're wrong about the $9.99 price.

The price should be set by supply and demand to maximize revenue. Selling three ebooks for $9.99 is better than selling one ebook for $26.99. Period.

Now, where do supply/demand curves maximize ebook profit? I don't know. But there is every reason to think that in the current market, the intersection point is much lower than the hardcover prices.