That's relatively new, but I was glad when they changed it. To be clear, it's not "outside the US", that's Canada -- the point is that prices are now listed in local currency, including in the US.
Back to the point: while I'm pretty comfortable with translating Canadian dollars, British Pounds, or Euros to US dollars, that's about as much as I can do in my head. I'm much happier seeing ~US$1.17 than ¥99, and I'm much more likely to buy the app.
So while I can see your point, I think it was definitely a change for the better, and it probably resulted in increased sales.
I think the point was that iOS apps have a set of fixed prices in each area (in local currency). Here in the UK the cheapest non-free app is 59p (corresponding with a 99c app in the US store), the next is £1.19 ($1.99), and so on. This makes for a better user experience because people can think in terms of the price brackets.
Back to the point: while I'm pretty comfortable with translating Canadian dollars, British Pounds, or Euros to US dollars, that's about as much as I can do in my head. I'm much happier seeing ~US$1.17 than ¥99, and I'm much more likely to buy the app.
So while I can see your point, I think it was definitely a change for the better, and it probably resulted in increased sales.