I think it's the fact that you know the price floor is pre-meditated. When you negotiate with someone you feel like you are both compromising, whereas in this case you know they've already decided what their fair price is, and are hoping you don't push hard enough to achieve it. Which may sometimes be the case in real negotiations, but they put a human face on it which makes it more friendly.
If you play with it enough, you'll see that it won't go down to the minimum in all cases. The algorithm will insist on what it analyzes the user will pay, and will prefer to lose the sale on account of saving its credibility for the long run.
Also, this is just the beginning. It will get much wiser as we go.
I think the risk is that:
1. users will know the price is not correct, and even when they 'haggle' it down, they will feel that they are in some way being taken for a ride.
2. users will be left wondering if they could have paid less
3. users that don't haggle, and find out later will become a support cost, as they phone up to demand the price that their friend paid
4. users that don't haggle, but find out later, will simply feel ripped off, and will not return.
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I think eBay handles this quite elegantly, with the 72 hour window for a response. Often I want something ASAP, and even though I know I can haggle, I'll pay the buy it now price rather than wait for a response. Alternatively I'll wait for a real person to get back. Knowing that someone is considering my offer is pleasing, as is their comments back sometimes, explaining why they can't meet the price I suggested, which can turn me into a customer at a slightly higher price if I like what they are selling.
Automating this too much removes the interaction, and the feeling of achievement - if ever purchaser from a market store in Egypt knew what people had paid before, it would feel very different.
