It's an interesting idea and will probably work great for him. But I honestly don't see the big companies going in that direction. Because they have to pay for a lot more than one guy sitting in front of a camera.
From the economics point of view, in a free market, the price for a good or service will find a balance between how much people want to spend making it and how much people want to spend buying it. Sometimes, this equilibrium price will not be the full story. Some people will pay a high price for it. Others will look for discount vouchers and get it with that. The Pizza stores know that there the equilibrium price is low. But some people will pay for the higher price anyway. This way they get the best of both worlds: those people who will pay the equilibrium price and those who will not care to go and look for a discount and pay the higher price.
You can get Silver Dream at ellusionist for $29.95. Or you can get Silver Dream for $4 (and you get two volumes of excellent stuff along with Silver Dream 2!).
Some people will still buy it from ellusionist.
And, with all the copyright infringements on youtube alone...it makes sense. Volume will earn you just as much, if not more than high price. If you find the equilibrium price. Particularly for something that's just a download (ie you make it once and that's the main cost). I'm guessing that this is excellent awareness of the market.
As much as my wallet appreciates the danger magic has always had is that the secrets must be kept secret somehow. Cost and knowing where to find them was a good barrier before. We don't want the general public to know how we do what we do. Otherwise the veil falls and with it so does the illusion and the magic.
Somehow, I don't think that a $2 price will stop people putting things up on youtube, etc. I think that a high price will make people think twice before they upload a "tutorial" because they would appreciate it more (after all, they had to spend their hard-earned cash on it, so why shouldn't everyone else?). At $2 you may not get the same loyalty.
All intelligent observations, but let us also consider that value and price are not the same thing. The magic industry is looking at a glut of products over the last ten years. It's easier than ever to publish ebooks, cheap DVDs, and downloads. Piracy is in part a result of a situation where we have a lot of high prices, way too many products, too few reliable consumer advocacy and review sites, and no effective way of getting more critical but difficult to access information.
I'm skeptical that changing the price point is going to help all that much, in other words.