I frankly would be surprised if a mundane player found 50$ to be a bargain for Dominions. A few more bucks does not seem that likely to make a difference for the non-convinced player: 50 bucks is still as expensive (if not more so) than a retail game with their shiney graphics, so the comparison is never going to turn out to Shrapnel's favour.
Then again, perhaps I'm biased. I bought Dom II for roughly 60 euros, with a fast delivery and no hassle, and found the price fair enough. Games here are (or were? Been a while since I last purchased anything in retail) more expensive than either Dom II or Dom III (through Shrapnel). Or perhaps it is because there were also complaints about the pricetag for Dom II a couple years ago.
Of course, I'm not saying it is good news, but I'm more concerned about the "why" than the end result. Somehow, I doubt Shrapnel has raised the pricetag so that Tim can buy his third mansion in California. I'd trust Shrapnel that something is not looking quite so well in the Book of Scribbled Figures of Doom (the accounting department, and the dust therein), hence making the price increase necessary.