The impulse buy thing is a really important reason this works.
For example, I adore Transmit and have no need for any other FTP app. I bought Forklift anyway when they discounted it to $1. Haven't even launched it yet.
Same here. I'll buy two or three <$3 apps and not think about it. >$6 and I start thinking about my budget, and slow down. Same issue with Steam sales. The advantage of the AppStore is the payment integration and instant install, it works really well for the impulse, "I need a nifty new tool" type of personality.