1) People would stop watching movies for free through piracy. I'd rather have a couple of people watch my movies and pay something, rather than them not pay at all. Get what I mean?
A lot of people (*coughMPAAcough*) say this on the assumption that people will either pay something or pay nothing for a movie without taking into account the various factors. Obviously, there is a subset of people who will NEVER pay for a movie no matter what - these are the people who would sneak in through back doors in theaters and whatnot. You could feasibly show the movie for free and they still wouldn't go b/c they'd complain about the gas price that it takes to get there. Thus, these people will never represent a sale, no matter what.
But either way, remember the first category of people b/c they need to be factored into the equation - they're part of the demand but they'll never supply their money.
2) Also, with the tickets so cheap, more people would actually go to the movies because it isn't really hurting their wallets.
There are more factors than just price. People need to feel that they're getting value for what they pay.
For example, I could careless if the local theater shows the latest Adam Sandler movie for $1 b/c I'd still feel like it's a dollar wasted (not to mention the 90-120 minutes of my life wasted that I could've spent doing other things). On the other hand, I GLADLY shell out the premium for an IMAX showing of the latest Chris Nolan movie b/c I know that every dollar that I spent will be worth it.
Thus, it's not just about low ticket prices. It's about making people feel like they've spent their money well, that either the directors have told a worthwhile story and/or that the audience is taking part in a cultural phenomenon (Avengers, Batman, Inception, etc.).
Speaking of cultural phenomenon, there's also the experience of going to a theater, which ranged from "fine" to "why the heck would I want to?" I've been fortunate enough that my most annoying theater experience was this idiot mother who brought her baby into the theater (forgot what movie it was) and halfway through, during a dramatic scene, the thing started crying and wouldn't shut up. After a couple minutes of the thing whining, someone in the audience got up and ordered the lady out, to much applause from the audience.
Aside from that, most of my theater experiences have been pleasant, which seems to be the opposite of apparently everyone else on the Internet. A $3 or $4 ticket wouldn't be worth the paper it's printed on if the theater-going experience is unpleasant such that the audience can't enjoy the movie, which is why I hear a lot of people opting to just watch it at home where they don't have to deal with
people.
Thus, the bottom line is that blaming high ticket prices doesn't take into account various other factors that come in play as to how the consumer's money is spent.