What’s up with Ebooks?

I realise that this next is the same level of question as the “Why do foods with LESS fat cost MORE to make”, but I don’t think the answer is the same.

I was looking at Google ebooks and the book on there are generally the same price as paperbacks.

Why?

A hardback book costs, say, £20. The paperback version costs around £8.

I assume this difference in price is because the production process for the Hardback costs more, as does the nice shiny card-stuff they use for the eponymous covers.
(Plus a bit extra on top, because any excuse to add to the price is a good one).

I assume a paperback costs as much as it does because you have to pay the following things:

• Writer
• Agent
• Publisher
• Press
• Cost of Printing
• Distribution
• Mark up for bookstores
I don’t know anything about book publishing, but these categories seem reasonable to me.

So why would the same book cost £8 on Google Ebooks?
The very nature of the e-book would seem to remove the Publisher, cost of printing, distribution, and book shop mark-up from the equation entirely.
So what costs might it add?
• Server space.
• Programmers
• Graphic artist
• Distribution programme
But these things are done en masse. Unlike a print run, which might have a cost of say, 50p per book, you instead have to have a personal page for the book, which might have cost you £30 in man-hours in design, server space and implementation; but this can be applied to all of your books. Or, at least, a lot of them. And just retrospectively; it’s to all the future books too. Apply the cost of this one page across all its uses and the price dwindles more.

So, my question again, is WHY THE HELL DOES AN EBOOK COST THE SAME AS A PAPERBACK.

(In related topics, DRM for ebooks is awful, and why does everything end in 99p in every context?)