You are not wrong about water and such as Nitrogen is an inert gas.

The bigger impact on bikes, as per a recent article I read would be that Nitrogen molecules are bigger than Air so you would lose less air and not have to fill your tires as often.

Also, the $2 - $5 per tire includes free refills.

Is it just a botique scam, probably. I'd certainly love to fill my tires less often, but not at $10 per bike.