That's probably true. But at the same time I genuinely believe that printed product-oriented just isn't a good business plan. I think that there is definitely room in retail photography for licensing that can meet clients expectations without under selling oneself.
I do not think most people will be willing to buy $1250-worth of digital files, this is compounded by the fact that you can get a decent scanner for less than $50. Is it illegal, you bet it is. Does that matter? No. At the end of the day, you're out $1250 and you have no control over the quality of the images and no real say in how the files are being used. If you try claim your copyright, you're screwed again. It sucks, it's total victim-blaming, but it's true. You cannot win like this.
Ultimately it's the entrepreneur's challenge to make it in existing markets. The reality of today's market is, one, clients are demanding flexible licensing, and two, people are willing to and feel justified in stealing from you. How you navigate these challenges is up to you - but failing to meet these challenges is why businesses go under. For some, they fail to make it by charging too little. Others fail to by charging too much for products that people don't want. For a few they fail because they have a sense of right and wrong and get burned for it. It's unfortunate. But the end result is that they failed.