I've been doing this full-time for about 2 years now, with some products that have taken off and others that have entirely flopped.
I agree that the "easy money" (e.g. air horns and flashlights) is entirely gone, but there is still a ton of opportunity available if you're willing to put in the work. The type of work necessary now is 1) different than it was 3 years ago and 2) different than what would be required of a web app. The App Store has evolved quite a bit over time and the bar seems to be getting set higher and higher.
In particular, user experience, design, and polish are supremely important on the App Store. I think unfortunately a lot of indie developers (especially engineering types, including myself at the start) tend to overlook this aspect - either from lack of time, energy, or budget, and as a result they make a poor first impression and never really build a following. On the App Store, it's more difficult to ship a MVP and iterate because users expect quite a lot. (You can still do it, but the 'M' might be in different areas than you would expect.)
On the other hand, there are a ton of iOS devices on the market right now, that number is continuing to grow, and that means there are many many users willing to put down money for your software. Apple takes care of the details of collecting payments and makes it easy for users to buy your app.
That said, there are definite tradeoffs to selling via the App Store vs selling on the web.
- You're definitely cognizant of the fact that you're playing in someone else's walled garden, and this can bite you if you're not careful.
- Like you mentioned, the sales funnel is a black box, which means it's very difficult to measure or optimize.
- Traditional advertising methods (e.g. AdWords) typically don't work cause app prices are too low.
I've also done both and prefer the App Store by far - business aspects aside, there's just something really fun about making iPad apps.