This means that for foreign customers of yours, your product will have constantly fluctuating price. I personally don't find that desirable. Also, there is some considerations to be made for purchasing power especially for items like apps. $1 might be trivial in the US, but it may not be so in a third world country.

The whole point is that it is not a multiplication with a conversion rate, it's a mapping that is not purely multiplicative, which has coefficients that in some regions may be significantly different than the exchange rate, that provides round numbers and stickiness to them, and avoids temporal fluctuations - prices in regional markets get adjusted when the ratio gets too far off, not with every change in excahnge rate, in order to reduce the frequency of price change.

How much do you think about spending 5 dollars? How much do someone who earn 10 times less than you think about that exact 5 dollars? Price categories absolutely make sense.