With the price fixing the only competition in town is priced at free. Therefore the market should bear somewhere between $10 and free. But not $10. Its still a ripoff no matter what way you shake it. Competitively, paying to download something is purely for the convenience of not having to hunt down a free copy. So I'm paying not for the music, but the ease of downloading it instantly. And thats not worth $10 to me.
(Ok, so the music you buy doesn't have DRM, that is true. But its still worth absolutely nothing after you download it...)
There are two flaws in your argument. First, the price is no longer fixed, Apple took care of that. Granted, Amazon didn't give that option before, but they do now. Second, the market obviously would bear $10, which is why the Amazon Kindle store took off as it did. If the market wouldn't bear it, people would not have bought the Kindle and the books. Remember, Capitalism doesn't care what the fair price is, but what people are willing to pay.
(Ok, so the music you buy doesn't have DRM, that is true. But its still worth absolutely nothing after you download it...)