I think part of it is that I personally have never paid $60 for any garment, so part of me feels strange charging that much for one. That being said, I will definitely consider your advice, and I'll let you know next time I feel like making a jacket!
The garments you're buying ate mass produced at a factory for ridiculously cheap. You're not a factory mass producing clothing. You're a single person and an artist. There's value in that. I don't know how much you check out the local art/artisan scene around you. Look at what people in your community are willing to pay for handmade quilts, hand blown glass, statues made of welded scrap metal, etc. You might find yourself surprised. Keep in mind though, "starving artist" exists as a term for a reason. Artisan works and art is not a get rich quick scheme. Often a lot of times these people have a very supportive and a very understanding spouse bringing in a regular 9-5 paycheck to make things work.
The artisan scene is part of what makes me really excited about Portland, not much of one where I am in CT though. I only buy/acquire clothes secondhand, but I do think taking into account the terrible system that makes insanely low first-hand prices possible is worthwhile. I mainly think that it's hard for me to look at the artificially deflated prices of places like Walmart and not feel like I'm artificially inflating my prices if I charge, say, $60 a shirt.
Think of it this way: If you charge $40 a shirt, you will be making basically $20/hr (at best), and you will be SLAMMED with orders. Say, 40 shirts a week. (Because sewing time is quickly going to be way overshadowed by fabric/button/fabric store time.) That's $1600/wk. at a break-neck production pace. Your hands, arms, shoulders, and eyes will quickly tire. The quality of life you have outside of "work" will deteriorate as you spend more time in pain, and less time on social things. Or... You could charge $100 a shirt, make 3 shirts a day, and still take home the same amount of money without damaging your body, health, or social life.
I think he could definitely command $100. That said, it's all about having access to the people that would pay $100. If you do't have access, you don't have sales. I think that a $50 shirt, including shipping - which shouldn't be more than $5 to anywhere in the US, is a good start. Once you can't keep pace with those orders, raise the price to $80 and so on... You can always raise the price. No shame in that at all. But find your market first. Have people asking them "where did you get that shirt...?" and go from there. Edit: Also, when you're starting a business you almost should be so busy your hands fall off. The more shirts he's making the better he will get. Much better for him to be cranking out 6 a day than 3, if nothing else so that he can further hone his craft.
The people who make Ferarri's don't drive them... In college I made loudspeakers that cost $225,000 a pair... Trust that there is a market. I really, REALLY think you've tapped into something with the color-your-own-shirt thing.... above and beyond the awesomeness of your other shirts - which are nice enough to charge custom dollars for.
The "Value" comes from the custom tailoring. There was a company in Seattle that was selling custom sized shirts for about 80-100 each. They would take your measurements and then send those to their sweatshop in chindiadesh to be made. If you are hand making them for your customers thats how you earn your value. High quality materials, made locally and fits perfectly. Your time is too valuable to use the cheap fabrics but once you use high quality fabrics you become somewhat competitive on price and quality especially when you add in a $10 made in the USA/Local markup.