This guy made $227k largely because he has very little competition in the 99c market. I don't think it's likely that "within 5 years, all digital books will cost 99 cents"; unless e-reader ownership dramatically increases, the market is not large enough to support the volume required to make many 99c books profitable.
I disagree. He has made a lot of money in a 99-cent market populated by those particular readers. There's nothing to say that there isn't a 99-cent harlequin romance market, a 99-cent pulp sci-fi market, a 99-cent hard sci-fi market, a 99-cent cookbook ma-- you get the idea. Sure, there will be a lot of overlap in readers, but I don't think one or two people will flood all of those markets anytime soon.
