No, I think he is talking about Photoshop. $700 for a first-time buy in is ridiculous these days. Adobe could make a lot of money on updates if they priced the first edition reasonably.
$700 is about the average price for a tool of it's caliber. 3DSMax is, what, $1500 these days? I know Modo is $1200 if you buy it brand new. Zbrush? $600 last I checked. When you get into the heavy, high end stuff, it's all expensive. PS isn't even the worst of the bunch.
You could say pricing it cheaper would make it more appealing to the mom and dad crowd. But what would they use it for? Editing colors in their photos? That's not even 1/50th of what the program is capable of. Why would Adobe want to lower the price for a market that won't ever use it to it's full advantage. Plus, if all they're wanting to do is edit colors, there are about 10,000 different programs that can do that one task just as well, with considerably less overhead, and for far cheaper than Adobe would ever be willing to price PS.
They're appealing to a limited crowd. A crowd that's willing to spend the money. Adobe makes their cash off charging more to this limited market. They'll never sell 3 million licenses a year, so they practically have to.
Now admittedly, I wouldn't mind it being cheaper by default. I'm not exactly a pro here, more the ever disdained hobbyist prosumer type. But hey, I've got a friend who works in education. I can get Student Extended for about $250 or so quite easily. And If, for some reason, I couldn't get it through her, I could always save my pennies and upgrade every other/third version. Or if I were feeling really cheap (and the economy is kinda rough right now), I've always got...
The Third Option to fall back on.