I do agree with Vella on one thing: no developer should sell an app for less than it is worth, and dropping to 99 cents to increase sales doesn't work anyway. But certainly there's a place for 99 cent apps on the store, and I know personally that a 99 cent price point will open me up to try apps I'm not sure about, especially apps that I might be interested in but that don't offer a free trial. Clive Downie of ngmoco says as much later in the article: it's about the balance between providing choice for your customer and supporting yourself as a developer.
In the end, Vella knows what he's doing: he doesn't say that 99 cents is always the wrong price, but that you should always stick to your guns and ask your customers to pay the right price. If a game is worth $4.99, or $6.99, or even $9.99, developers will find that customers who care about the quality are willing to pay for it.