I think of it this way: It's not the materials cost, but the creative costs. Someone researched, wrote, revised, edited, maybe researched some more, formatted, etc. And if it's got images or charts, that's more trouble on the production side even if it's ultimately going to be produced as an eBook. Chances are it's also published in paper and is probably more expensive. Without knowing what book you're talking about, it's hard to say what the reason is.
That said -- there never was a promise that nothing would cost more than $9.99. There was a stated goal that major publisher books would be under $10 initially. Not surprisingly, the next time they negotiated sales rights, that was changed.
Also, remember that value isn't just in materials or even production, but in what it means to the purchaser. What you are not willing to pay $16.99 for might be something that someone else sees as a bargain for whatever reason.
Now, I do agree that many kindle books are over-priced. But, honestly, for many, I can't make that judgement until I've read them. Not being sure of the quality of the writing, story, and production, I have some price levels at which I'm willing to spend depending on what I know of the author, whether it's a genre I like, etc. I have paid $14-$16 for kindle books by authors I particularly like. And I didn't think that was too much for what I got.
I've also read some that I thought were overpriced at $3. And a few I've borrowed for free that weren't even worth my time. No doubt, there are many who would think what I paid for the $14-$16 book was way too much and that the $3 was worth twice as much.
