I think from their perspective, you're paying for the service of accessing them in an easy-to-use format, and for those tech challenged enough who don't know how to download/convert/upload to Kindle. Perhaps almost like buying bottled water?
I'm with Heather -- I'd pay a few dollars if I wanted to just get a book easily and quickly, but not as much as $8 for something that was free. For that, I'd go to the trouble to learn to download/convert/upload. But if it was a couple of bucks to buy it, I might do that, just for the convenience of it.