What people forget about the pricing is that you don't need any significant hardware for PS Now. Just hook up your smartphone and get yourself a Dualshock 3, that's all you need. For owners of a PLayStation 3, the service just isn't worth it, but I don't think Sony targeted those folks in the first place. Sure, it might be an indirect Option for backwards compatibility for PS4, but it's also too expensive. Just getting yourself a PS3 will be way cheaper.
Also I think the prices will go down eventually. But I really think Sony isn't targeting the hardcore gamer here, but instead casuals. Give them the option to play all those PS3 games and get them to buy a console eventually. After all, Sony wants to sell consoles, they don't want Now to replace their hardware platforms.
Official member of VGC's Nintendo family, approved by the one and only RolStoppable. I feel honored.