de99ial: It is true that to buy a new product it has to be shiny. But from the other side all kind restrictions make that shiny shine less - so for some potential customer it works as a negative factor.
I think it is not a matter a price but balance between price and quality. If the product is good and with good price it will sell. If product is good but costs too much - it wont sell. And bad product even for low price wont sell at all.
Second thing - i disagree with that "if pirate cant steal he will be forced to buy it". When You go to the mall and there are free samples Yopu just take it - without thinking. But when You have to pay for smth You starting to think. Pirates mainly take it because its "for free" - without that free download possibility they will resign NOT buy.
I think that developer are going in bad directions. I think that if developer in moment of release new title would offer various possibilities they would make more money.
F.e. developer release a new shooter. So it give:
1. Download version - for low price. 10 USD for example. But it is one time instalation, full of DRM and other kind restrictions, without box, instructions and other shiny stuff.
2. AND box version - full of stuff, without DRM last version (internet connection not requaried), shiny and awesome looking for 40 USD.
Now each customer may choose between those two possibilities. If he want test, one play only - he buys a download version. Plays and after everything just delete. Developer got the money for cheap version (i think servers and soft for that stuff would be chaper than implementation DRMs). If someone wants a game for collection - he buys a BOX version, with guarantee that it will work after 10 years no matter what (even if DRM servers were disabled). Best thing of that situation is that every one that choose a download may decide for ma BOX after finishing game - if he says "Damn, that thing is great! I want that!"
Making money and user friendly policy.
Right now they choose worst wariant - expensive BOX with shitty DRMs.
Last but not least - i think that even GOG is for money. Not big for once but it has to work for itself. Look - new game is on shop - cost 40 bucks. Then it goes to a cheaper series - 20 bucks. After that it goes to a completely cheap series - 10 bucks, and at end goes to GOG - 5 bucks. On each level developer is making a money. Thats why it is so great.
Why they dont do it?
Actually, I am referring to the potential pirates. The ones on the fence. And DRM actually CAN make people buy. Look at MEPC. That was the first real hurrah for Securom's Activation model, and I think it might still not be properly cracked. People bought the game because they couldn't pirate.
And keep this in mind: too much difference between retail and digital won't end well for the publisher. Look at the PSP-Go, a purely digital distribution platform. Gamestop refuses to stock that, and even threatened to not carry normal PSP stuff (if I recall correctly).
As for your last real point, and I might have misunderstood since it was even more rambling than my stream-of-consciousness stuff, but keep in mind that it is a matter of profit margins:
I don't know the mark-up and the like, but keep in mind that games are rapidly getting larger and larger production costs. So they need to make sales to make back the losses. And even more, they need to make money to finance their next game. They need to make money to support patching (for the devs that do that :p) and to support the master server (the thing that lets MP happen).
If they need to depend on selling games at 20 bucks, that is going to require a hell of a lot more sales.
And even if they could make back their losses by selling at 5 dollars, keep in mind that these are companies. Many of them are publicly traded or are competing for juicy licenses. You want to have economic stability.
Plus, if you minimize your profit margins, you run into a risk of a single bad game killing your company. Or, even more dangerously, a single game that doesn't sell immediately killing your company.
By the time a game reaches the 20 dollar mark (or even GoG), the costs have all been made back and it is just a matter of the publisher printing out a few spares every once in a while. It is a small trickle of cash. It just so happens that a small trickle is better than nothing.