When you price your product based upon what you feel is right and upon your competition's price level, what do you get?
Uncertainty.
As a one man shop with limited overhead, I had enough sales to feel like I was doing alright and the uncertainty held off for a bit.
At TurboPower, sales were good. TurboPower was one of the most successful ISVs in the Borland Delphi market. But there was still uncertainty as to what would garner new customers and how we could get existing customers to buy into other product lines. There was uncertainty over how successful a yearly subscription program would be (e.g., let a customer buy all products for a flat yearly price).
And by pricing our products similar to our competitors, we made a bad assumption. We assumed they were successful. We assumed they knew what they were doing.
The only person that ever brought meaning to a price was the customer.