Okay, I think I get it now. Partly it boils down to folks possibly not valuing things I think are worthwhile, and not being willing to pay for them. For example, Kevin says that he thinks for most bestsellers, there are enough people willing to read them despite a ton of typos -- people who won't care or won't notice -- that copyeditors and proofreaders might not be necessary, for example.
I hope that's wrong. I hope that the process that led big publishers to decide that editors are useful and worth paying means that readers are, in fact, willing to pay more money in order to get clean, well-edited, well-designed books (whether print or electronic). We'll see. I know that when I read books with typos on every page, I put them down. Electronic or otherwise. It's just too painful.
I agree going online streamlines the process and eliminates some costs -- and I even think that part's going to get better, that it'll be easier and easier to take your manuscript and make a book on the other end. But at the same time, I do think the idea that once everything's online, marketing won't be an issue is wrong -- I think marketing will be a much bigger issue, because there'll be a much bigger pool of material to sort through.
My own stuff is a good example -- when the net was small, I was widely read. My page got a ton of hits. As the years pass and more and more stuff comes online, fewer and fewer people find my stories and choose to read them. I'd have to actively be pushing them through social networking (which eats up a ridiculous amount of time, and counts as work) in order to even match the number of readers I used to find online -- for free material.
Or, to take the small press example, I did try the micro-press route with The Poet's Journey. Result, a few years later? No online sales, and a handful of print sales at conventions, when I was actively hand-selling the book. Way more effort for me, putting the book together, since I had to do editing, copyediting, finding an illustrator, working with the illustrator, fine-tuning page design with her (she did the layout), researching how to upload it, getting an ISBN, setting up a web page for it. Conservatively, I'd say that I spent about two solid weeks of work on it, so 80 hours or so. I write about a thousand words an hour, so if I'd spent that same amount of time writing, I could have written the draft to an entire other novel.
Worst of all, I made one major error with the layout of the book, that if I'd had a five minute conversation with any decent children's book editor, they could have shown me why the thing I was doing was so very wrong, and would likely kill any chance to handsell the book to bookstores. I didn't know, and I didn't think to ask, and this is me with over a decade of experience in publishing at that point -- but I didn't have the specialized knowledge related to picture books. I can fix it now, but it's be a whole lot more work, several more hours. It's on the to-do list.
I think that most writers would rather write than do all the work of publishing. And that unless you as an individual writer, or you as a small press, are both hard-working with that work and quite lucky, your efforts are unlikely to meet with much success. There are a few individual authors who hit it big self-publishing, but they generally have some other co-factor propelling them to success. And for every one that does, there are thousands who don't, even now.
I do like small presses, and I'll even still submit to them. They offer services that big presses don't -- individualized attention, more control, probably a longer time on shelves if the book isn't an instant success, etc. Compensations, for the lack of money and people time they can afford to put into the process. I would love to see a ton more small presses start up, as long as they knew what they were doing and did it well; I think that would be great for literature as a whole, and help to counter the effect of the big companies consolidating and falling under other financial pressures. I might even self-publish more, for similar reasons. But it's important to be realistic about a) how much work it is (a ton) and b) what the likely outcome will be (far fewer sales than you'd get with a bigger publisher).