While $495 isn’t unreasonable, I’m a bigger fan of royalties or subscription. With a subscription model, you’ve got the flexibility of obtaining revenue from customers who you’d otherwise miss at the $495 pricepoint, while still being able to recoup a large brunt of the $495 over time. With royalties, while it still takes a piece of the pie, it makes it easier for true indie devs - i.e, solo devs, garage based teams - to implement at a lower/no cost initially, while still funding should they sell their game.
That’s the biggest issue; some people are going to use UE4 and never, ever make any money off of it - never even try, in some cases - so unless you’re an affluent dev, there’s little reason to choose over something free, like Blender with their sproutling tool. Will it look as nice? No. Is it as easy? No. But it’s free, and if you learn to do it yourself, you don’t need to subsist on ramen alone to pay off your license.