I agree that NBC should have the right to charge what they want for their product.
On the other hand, asking more than twice as much* for a season's worth of downloaded episodes than they're apparently willing to accept for the same (plus "special features") on physical DVD seems a tad excessive, to me. I'm sure that they would have been ecstatic, mind you, if Apple had caved, as would have all of the other content providers who would have jacked their prices as soon as they could, as well, but I suspect that, in reality, they are less interested in actually raising the price than they are in attempting to maintain the MPAA/RIAA-style monolithic control over all forms of the downstream.
Interestingly, assuming that Apple uses the standard retail rquation of "cost + x% = Price", the price rise probably would have had the iTunes store end up as less of a loss-leader, since their profits per episode downloaded would have gone up, as well.
That's, of course, assuming that they would have had any customers for the shows, when sold at a price that's 250% of what they used to cost.
I'll be looking, off and on at Amazon's page for The Office, and other NBC/Universal programs, to see whether their price for downloaded episodes goes from $1.99 to $4.99 in the next few months or not.
If they DO go up, then we can safely assume that NBC/Universal really WERE only in it for the money; if they don't, then the phrase "punitive pricing" might reasonably start being bandied about regarding their negotiations with Apple.
Cade - Any chance of a follow-up article from the Reg digging into whether/when Amazon's download prices might be expected to jump to NBC/Universal's "must have" price point?
* $4.99 x 24 episodes = $119.76; Amazon's (crossed out) "List" price for Season 2 and 3 DVDs is $49.98. Of course, if you go by their "actual" prices, then NBC's "must-have" price from Apple is 4 - 5 times the DVD price.