CS3 doesn't cost that much to buy I believe. That is just if you want to commerically distribute what you make (so Shareware devs. can probably get away without the license). I reckon that CShop3 will be looking about £60-90 for a shareware / freeware license.
And yes, that is a ridiculous amount. On the other hand, if people pay a lot, they think they are getting a lot. With a really professional website, I suppose Josh might be able to get one or two customers. Clearly CS3 is targeted at a very different user-base.
Consider this, some development companies pay £5000 or something crazy for a 3DS Max license from Discreet. They could probably justify the cost.
Personally I think it is a mistake from a marketing point of view to use the CShop name, as people will associate it with the £35-odd earlier versions - rather than thinking of it as a new product, and from the posts above - this is clearly demonstrated. I think a completely new name (eg: Cartography Studio MAX) would be better. The word "shop" associates it with products such as PSP 8, which are the £100, semi-pro / amateur level, not the £500 plus SERIOUS level.
However, with the CSG commands coming in U6, plus Kevil's lightmapper - maybe a few simplistic maplet-style world creators will pop up, which will be ample for most DBP users.
Personally I use Maplet for both Blitz3D and DBP worlds atm, its easier to use than CShop.