Indie label Asthmatic Kitty critical about Amazon's low digital pricing

In a new article for the Guardian, Sufjan Stevens's label Asthmatic Kitty criticizes popular digital retailer Amazon for the heavily discounted price of Stevens' upcoming album, The Age of Adz. The label said this:

We have mixed feelings about discounted pricing. Like we said, we love getting good music into the hands of good people, and when a price is low, more people buy. A low price will introduce a lot of people to Sufjan's music and to this wonderful album. For that, we're grateful. But we also feel like the work that our artists produce is worth more than a cost of a latte. We value the skill, love, and time they've put into making their records. And we feel that our work too, in promotion and distribution, is also valuable and worthwhile.

That's why we personally feel that physical products like EPs should sell for around $7 and full-length CDs for around $10-12 We think digital EPs should sell for around $5 and full-length digital albums for something like $8.

What do you think? Is it better to discount music to compete with illegal downloads or just sell music for a retail price and hope that legitimate purchasers will make up for the losses from downloading?