Authors have to eat and publishers want profits. Also, e-readers sell like hotcakes so the price is determined by the demand. Then there are the costs of developing and constantly improving the reader to stay competitive, the batteries are expensive, coders, scanners, marketing, warehousing, shipping, shareholder considerations, slaaries, taxes, insurance, infinitum. Or, perhaps ad nauseam.
Your VAT situation is interesting. I'd like to see justification for that. Well, any reasoning other than "because we can and we want the revenue." Governments have a voracious appetite for the people's moneys.