1) @PussyLover: you're right, but good luck with that
2) Even though that theme is really simple, $500 isn't unfair. It's like $50 an hour x 10 hours
3) the above being said, some people is too desperate that even a regular decent pay per hour is way above their heads
4) I almost fell off my floor laughing reading the remarks about "designers not knowing about traffic" (which, of course, it's true in most cases): As we do marketing research and research every fucking aspect of visuals related to traffic, niche, conversions, etc, I can confirm 99% of people has no fucking clue about it, designer or not. I can count with my hands the number of people that knows shit about conversions, then comes the "let's throw 100,000,000 uniques and see if we can get a bird" people, and then those trying to do teh same... with 100 uniques.
5) the above being said, designers are supposed to... DESIGN. Nothing else. If you don't know your business area, how do you expect someone out of that area to know it?
6) Both items above being said, do you expect a designer to design your site, give you valuable marketing tips (or even full strategic campaigns), make you sales and then you won't even pay $50 an hour?
Sorry, in real world any marketing expert charges maaaaany times that amount and doesn't need to design anything. Furthermore, you'd need to PAY a design company on top
7) For anyone thinking what I said above is not true, I proved myself right many many times with 3rd party data (do a search), while I never saw one of those magic programs converting at 1:xxx converting less than 1:5000 the last years (not my traffic, of course, so I don't give a fuck)
8) so back to the OP, he is right. And yes, there are reasons why those programs converting 1:5000 or 1:10000 or 1:20000 convert that way. And one of those reasons is trying to pay peanuts for one of the most important sides of their business: branding and image. But hey, the whole western culture is wrong, nobody gives a fuck about that!