[coderholic]

My guess is that is to manipulate all of the app discount sites that scan the app store and report on apps that have recently been discounted. If the developers drop the app to $0.99 then all of those sites will report this as a huge saving, and possibly feature it more prominently as a result (I'm assuming those sites are all automated - and there are a lot of them!)

[LinaLauneBaer]

I am the developer of one of those "discount sites". Well I do not have a site but apps for iOS and OS X that show you the discounts. I filter those things out on the server side in extreme cases and my Mac app allows you to specify your own filter criteria like in iTunes where you can have smart playlists. So for example you could ignore apps where the old price is $999 and the new price is $0.99 or something like that.

http://store-news-app.com/