They are two different ecosystems. Paying $.99 for an app on iOS is commonplace, because most developers charge for their apps. There are usually "lite" versions, but that's about it. Couple this with the fact that all iOS devices are tied to an iTunes account that usually has a credit card attached, and buying apps is very simple.
Android's Market, on the other hand, is heavily based around free apps that are ad supported. As such, most Android users choose not to pay for apps because there is a good chance there are free alternatives. Most of the paid apps for Android are "donation" types of setups where people just want to support the developer. Also, not many Android users have a connected credit card for easy payment, as one isn't really required to activate or use the device.