I feel like this price increase is more about funding their silly add-on features for prime that nobody signed up for.
Like paying for content licensing for their instant video service. I've tried it a few times, and it works ok for low resolution stuff. But every time I try to stream something in HD, it freezes up, switches to SD a lot, and is generally just a miserable pain. Really leaves a bad taste, so to speak, when you pay to rent a movie in HD only to have to watch half of it in 640x360 or something close to it.