Your the one full of baloney here!
But the $2 comes from the shipping and publishing. When they are doing mass quantities in the thousands, the discounts on material and shipping are massive. So on a $20 book, only 10% of the list price is for printing and shipping, while the other 90% is editorial, publishing and profit for the book store and publisher.
It’s like with pressed DVD’s. The reason why print-on-demand DVD’s from places like Warner Brothers and Sony use DVD-R’s is because of the cost. For pressed DVD’s that you see in Walmart or other stores going for $5-$20 dollars, publishers need to print at the very minimum 5,000 copies (most say 10,000 is their minimum before they can see discount returns) before they can even offer a disc for $19.99. Otherwise below 5,000, the cost of making the glass master and materials would cause the publishers to have to charge $1,999.00 per disc (for the glass mastering alone you are looking, for the barest bare bones DVD at about $2,000USD).
And in an industry like Ebooks where the market has lost 30% over the past 5 years, it would be very easy to not offer underselling Ebooks anymore. If the server stops working and they need to reload the files on a new server, why pay someone to track down a file for a book that doesn’t sell.
But with books from the 80’s and earlier, in order to get them into digital, just like with video, someone has to convert the analog material to digital. Sure authors may’ve sent floppies in in the 80’s—-but how often are the publisher’s going to find those floppies or even if they did, still have a working program to access them (that is if the floppies haven’t gone corrupt)?
And in the 90’s, the digital files were generally sent to the printers for the printers to use—-the publisher didn’t keep them. So now they have to contact the printer to see if the still have the digital files—-and if the printer’s our of business or the book went out-of-print years ago, those files may be long deleted. So now you are getting into what could be called “TNG-R” territory where the publisher needs to lay out more money to publish the book. And in an industry where the year-to-year returns are vanishing by 6%, that would be a hard business decision to make, unless it had been a really popular book.