I like the article, but yeah, price anchoring is the real issue here. App prices on mobile devices is largely a result of the race to the bottom, hence why there's a large disparity between price for the same app on mobile and desktop. (Assume equivalent functionality and difficulty of development.)

The coffee cup analogy is about putting the price of mobile apps back into perspective, getting people to not feel ripped off because just they're paying $1.99 instead of $.99.