I don't believe that the cost of converting from physical to virtual doesn't lead to significant cost cuts. No shipping. No warehouses. No physical shops in expensive locations. No warehouses.
I think the intangible costs of bringing books to market probably are higher than most people think they are (the point of the grandparent post) but that's besides the point. So what if the cost is significantly reduced? Books should be priced at whatever price the market should bear. Reduced price for consumers is not an absolute good; higher profits at publishers increase the incentive for them to continue bringing books to market.
Well the point is here that in many cases (I'm looking at you iBookstore, among others) the cost of the physical book is lower than the ebook, but the profit on the ebook is higher if they were at the same price point.
In what possible set of circumstances would you want to discourage people from making you more money?
Here's a big reason you don't see price cuts: the same party isn't bearing all the costs you mention.
With physical books, publishers pay for production, freight, and centralized storage for distribution to retailers.
Retailers pay for maintaining their own active inventories, including warehousing and shipping from their warehouse to individual stores, as well as paying for physical retail space.
(And if bookstores don't sell the books within three months, they can return them [hardcover] or strip them of their covers and trash them [paperback] and get a complete refund. Talk about uncertainty.)
Only one actor -- the publisher -- sets the suggested retail price, upon which the discounted price a retailer pays is based.
I don't believe that the cost of converting from physical to virtual doesn't lead to significant cost cuts. No shipping. No warehouses. No physical shops in expensive locations. No warehouses.