As someone who does illustration for a living (or tries to), I often would undersell myself too until I tried to think of it in terms of time spent. I can't expect a client to know how much my work is worth if I myself can't even go 'yeah, I think it'll be this amount for this thing'.
I think there's just people who don't understand the work/time involved. $25 US for a commission could work for someone just beginning if took them, say, two hours tops and took little in the way of materials to do. If it takes two hours, it'd be $12.50 an hour, not taking into account any material cost. Bonus if I retain rights to it, but that's more for illustrations, not personal commissions.
Where we get into 'uh no' territory is when it's, say, $25 for a commission that is going to take at least 5 hours after research, fixes, etc. That'd be $5 dollars an hour, for a custom piece of artwork made for one person. That's less than minimum wage in most US states. That's $25 for five hours I can't spend doing something else, whether it be for work or personal things.
A commission to someone for cheap isn't going to get anyone's foot into any door. It just gets me recommended as the artist who'd be willing to do it for cheap. I'd rather reserve lower prices for someone I personally know and trust, a charity needing art pieces for an auction, a project I want to help, etc.
This is my two cents, and I didn't get a chance to read the OP, so this doesn't reflect on anything they may have said.