I really liked this post and I posted it on my Facebook, too, saying it articulated exactly why I don't sell my knitted things.
The summary is, a crocheter received some nasty feedback from a craft fair goer about one of her hats. She hand-crochets hats and was charging $150 for that particular hat. The customer didn't think the hat was worth that much, but the creator broke down the costs and explained how much she was getting hourly making that hat.
I like toward the end of the comments on that blog post that people start talking about art vs. hats. Art is art and it shouldn't be undervalued, but I get where some of the commenters say a $150 hat just isn't in their budget. Maybe they don't understand that the creator isn't charging what she THINKS it's worth, she's charging it what it is worth, based on concrete facts, such as cost of materials and paying herself an hourly wage.
It's also interesting to note that there are some commenters who craft because they enjoy it and others who craft to make a living. One lady who commented said she hasn't beaded in months because she has nowhere to sell her products. What about beading just to enjoy it? What about giving your crafts away as gifts? Are you really valuing your craft if you enjoy doing it but don't do it just because you can't make money off of it?
This is one topic that is usually discussed ad nauseum on Ravelry, along with copyright/fair use issues, crafting ethics, etc. It seems whenever money is involved, there's an issue.