Many of these same thoughts came to mind while I was building the app. I came upon the price range when comparing it to other guide books which cost a great deal more... and certainly don't carry your pack. I suppose it is important to remember that it is more of a guide than an app, and there certainly are not many .99 printed guide books out there.
The good news is that it does work offline, and as for competing with Ivar's app there isn't really much of a comparison. As far as I can tell they provide two separate functions.
There is always a decision to be made when it comes to generating revenue; and in the case of websites and apps an option for reducing the price to the consumer is to include ads. I've never liked ads much, and have kept them off of the site and the app for that reason.
It is all certainly stuff to think about as we move into the age of digital portability. I began my pilgrim life in 2003, and remember having to wait several days to write an email. The internet has caught up to the camino (and much of Spain) and I was surprised to see just how many albergues had their own WiFi. It's all part of the evolution I suppose, and carrying a smart phone to keep in touch seems like a sensible approach to me. I carried a wifi only (locked sim) iPhone along the San Salvador, Primitivo, and Invierno. I was able to peck out emails in the evenings, and was never more than 30km from an open connection to send them off. I would have been happy to have a guidebook on the same device, to see at a glance how far things were and what I could reasonably expect to find when I got there. That is possible now for the Francés, and will be soon for the others.
Also, a droid version is in the works. I had to start somewhere so I chose the iPhone as the first step. Watch this space in about a month for the droid version.