Agreed ...
It really is normal practice in pricing though -- not unique to this game, not even unique to games in general.
We all get taken by this kind of pricing every day.
Consider a discount coupon: "50% off your first order." "Free shipping during your first month." "Get 3 months at 50% off with a 12 month contract." "Take the $5 combo because the drink costs $3 on its own."
Same as my subscriptions to ... Spotify, Netflix, Amazon, you name it, even premium credit cards come with with year fee waived.
Its all the same. You need to slowly ease people into the idea of spending. The $5 extra builder got my first purchase in this game, I would never have jumped to a $99 pack. I don't think they even offered it, it wouldn't make sense to offer it until after someone spends the $5 for the first pack to break the ice.
And if people stop spending you start offering the low offer again to see if you can get them back on board. That's retention. Try cancelling your mobile phone service plan and watch the amazing offers they start to throw at you.