It is a lot. Record companies don't want you to buy online, they want you to prop up their traditional multi-middleman distribution schemes, so they can go on paying a artists a fraction of a percent of profit from the record sales, and only after the band's high-risk "startup loans" are repaid.
Think of all the expenses that don't have to happen when distribution goes online, and yet the price stays the same (or goes up, now you're paying for the convenience.)
I just went on the iTunes store and picked random albums from the front page, a few to be extra thorough, and you know what I found? Most albums are $9.99 or $12.99 with single tracks for $1.29. Maybe it's because I'm browsing "chart toppers" but after clicking through a couple of albums, I honestly don't see any songs for $0.99.
Where can you actually buy music online that is any more expensive than iTunes, if it's such a bargain?