Some random thoughts:
1. The higher the price, the less likely someone is to buy an item on impulse. This is basic common sense and premise of the person who started this thread. Most people plan their larger purchases - car, home, $50 B5 book.
2. Overall inflation rates are a weak argument for specific price increases. While many of the costs of producing and printing a book have increased over time, technology has made parts of the process much cheaper. In addition, much of the extra quality gamers are demanding is possible today because technology has made the tools - especially software - reasonably available. I don't mind a publisher telling me that the cost of their book is justified by their actual costs - just don't waste my time comparing dollars from 20 years ago.
3. Publishers are saying consistently that they can't make a profit on their products at the same price points charged just 3 years ago. I believe them. It just doesn't make me want to spend more on my hobby each month. It does make those publishers who successfully add extra value to their product more likely to get my limited dollars, hence the focus by many publishers on adding production value, not reducing prices. And yes, value is very much subjective among customers, so no publisher will please everyone.
4. There is an enormous glut of product in the market, so much so that even if I just wanted to own the very best, it would cost $100's or $1000's. Add in all the dreck, and it's no wonder individual items are not selling as well as 3 years ago.
5. There is an enormous glut of product on my bookshelf, so much so that I rarely impulse buy any more. A product has to really fill a need (I can always use more
good town books with fleshed-out npc's) or be about something I really like (SG-1) for me to buy it now. Add in the whole 3.0/3.5/some other d20 system business, and I'm even pickier.
6. As product costs go up, I spend more time looking for cheaper alternatives - ebay, wal-mart, online, etc. This harms my FLGS, but as a consumer I have to make choices and paying full price (and thereby getting perhaps 25% fewer products) just to support my FLGS is a tough decision. I try to balance these things, but when the
savings on one item approach $15 or more...it's hard justify going to the FLGS.