They poured a lot of money into promoting Vista. I used to see ads for it before it was released, they were everywhere. Their expectations for sales numbers were big. Many home consumers downgraded to XP. Reviews were merciless. Businesses did not adopt Vista. For all practical purposes, XP is still Microsoft's biggest hit and most used OS.
I honestly think that the development effort to create W7 has been much less exhausting than when they were working on Longhorn since they had Vista to base it on... And in that sense, they should use more competitive pricing. But the problem is that they'll want to make up for the Vista numbers... And while I don't like it, I can understand it.
What I don't agree with however is this edition business. Vista was such a heavy OS that having separate editions made at least some kind of sense. But the W7 beta and RC are Ultimate editions... This is not heavy. This isn't a resource hog. I see the Ultimate edition being just as user-friendly and appropriate for the home user, the power user, and the business user. 7 is lightweight and fast even on less astonishing hardware. And in all honesty since a lot has been stripped down for this OS, I'd say the Ultimate edition doesn't really seem to contain anything that I would like to see (or would feel to be appropriate to be) stripped from any Home editions.
If memory serves me right, 95 and 98 didn't have any "professional editions". They were just Windows 95 and 98, with service packs bundled in for Second Editions later on. I think it was Windows 2000 that started this whole Professional edition business. And then XP just took it to an extreme.
I don't think W7 needs any editions beyond regular (Ultimate) and corporate (Business). This Windows 7 Ultimate I am running now is the bare minimum that Vista Home Basic should have been.
Back when I was an XP user I used a pirated copy until the prices came down to what I considered reasonable. I bought XP Pro from a reseller for $80 and thought it was a fair price for what I knew I was getting. No, it's not the consumer that has the right to decide the price for something, it's legally up to the business producing the product. But let's get real here... $499 introductory price tag for Vista Ultimate? Some extra screensavers and sound packs? That was more than I paid for rent. Here's hoping they'll use their brains this time. Activation schemes aren't going to throttle piracy... Competitive pricing can.