Does the App Store really need another photo editing app?
Yes. I really like the variety of them. They all do things differently and have a tool that stands out. Camera+'s Clarity, Snapseed's filters, Hipstamatic's 35mm feel, etc.
Does the App Store really need another photo editing app?
Greedy.
I can't get all that worked up about forking over another $5. It's a great app and if we as iOS users want companies to develop decent software we gotta stop trying to freeload or have unreasonable expectations. It cost Adobe $ to downsize the app to the iPhone, so we should expect it to want to recoup and profit from that endeavor. $5 is not unreasonable given the power of of PS Touch and it's competition.
For those of you in the U.S. iTunes cards go on sale all the time, usually 20% off. If you are smart enough to stock up then it's only a $4 app -- a gallon of gas is more expensive, and that's only good for 20-30 miles.