I definitely think $30 - $35 is an acceptable price to pay for something that is made by hand, and on an organic-fiber t-shirt to boot.
If you really want to make money on this, I think you will have to go for that higher-priced market. Your cost per shirt is already high, and you also have to factor in the time it takes to airbrush it by hand.
One important thing you have to figure out is: Who is your target market? First of all, someone who doesn't mind spending $35 on a shirt. Secondly, someone who is attracted by the enviro-friendly and handmade aspect. Thirdly, someone who is attracted to the design itself. Don't make the mistake of thinking that the design is the biggest selling point - I see a lot of designs out there that I love, but if they are out of my price range I just won't buy them.
After you figure out who your target market is, build your brand image and everything else around that. It is something that will take a little research (see who your competition is) and a lot of work (you might have to re-design your website) but it will be worth it in the end.