That may be the cost to press a CD (I have no idea), but saying that we're creating something for $1.99 and selling it for $29.95 is disingenuous. That's like saying that the worth of a human body is simply that of its raw materials (which is less than $50 if I remember correctly). What does it cost to buy a book? Do you think that the price you pay for a book represents only the amount that it costs to print the book?
First of all, your simplistic statement doesn't take into account the cost to acquire the data (which can include up front payments as well as royalties), nor that of converting it into electronic data (which starts with planning on the best way to present the data in electronic form, to the conversion itself either scanning or keying, and creating an index) and other steps that I'm sure I'm missing.
Second, there is a difference between how much something costs to produce and what its value is. What if a CD provides you with a piece of information for which you've been searching for a long time? Or maybe, a CD has data that you can buy and use in your own home that otherwise would have required you to travel a long distance to use. In many cases, the expense to someone in time and travel costs is more than the cost of a CD.
Third, there are times when the cost of a CD is less than the cost of the same data in another format. Take, for instance, the books Germans to America. This is a multi-volume set of books. We have them on 2 CD sets and charge $59.99 for each CD set. The first CD set contains volumes 1-31 of the Germans to America books. To compare, the price at Amazon.com for just volume 1 of the printed book costs $56.25 (plus shipping and handling).
Finally, we are a for-profit company. Unless we make a fair return, these products wouldn't exist. We feel fortunate in that we can provide help to people and can also be a successful company at the same time. Those goals are certainly not mutually exclusive.
Sincerely, Paul Burchfield, Genealogy.com Technical Support