except that they don't have CC transactions for EACH app you download, do they? I believe they make a bulk charge at the end of the day so if you download a $2.99 app and three 99 apps, they don't pay a transaction cost for each app. They pay $.25 + 2.9% of $5.95.
I was being conservative with worst case scenarios.
The purchase of a single 99 cent app likely costs apple money. The purchase of a free app does as well, but usually a much smaller amount (the cost for the download bandwidth).
1.99 is probably guaranteed profit. We work with some of the largest downloads in the store from what we can tell, and even at amazon s3 rates, a 1.99 sale should generate a few cents for app.