Why shouldn't an artist sell the CD for whatever s/he thinks the content on it is worth?

Because it's a CD-R, not a CD, and it cost them buttons to produce with minimal outlay. A CD on the other hand requires a degree of investment and a certain need to break even with regard to an established market place.

I like CD-Rs for this very reason, BTW - but feel anything over £5 is taking the piss somewhat.