I hope we'll find a way to keep publishers (not just artists) in the business. With music there was a lot of hope that "flat" distribution would allow unknown artists to sell directly to the public, retain artistic control, and cut out the middleman. The public would find the gems and they'd be rewarded. Some of that has happened, but I'm not sure that overall the situation is better today than in the days of vinyl. Bringing down the "barriers to entry" (with desktop studios and instant distribution) has not been an unalloyed blessing. As a consumer, it's just too much trouble to sort through the mountain of chaff to find something I might enjoy. Record companies did a pretty good job of spotting talent and putting it into easily searched "bins." The situation with literature will be even more of a headache for consumers: It's easy to sample 20 seconds of a song and see if I like it, but I sure don't want to invest 30 minutes reading a self-published book to figure out if an author has talent. I'd be just as happy to let editors and publishers retain that traditional headache.
Excellent point! They helped increase the signal to noise ratio and therefore allowed us to better use our time - now one might argue they have their built in biases for what a signal is, however, avant-garde things did break through over time. However, the classics of any genre are considered classic because they have weathered the test of time.
Generally, this is the classic centralization versus de-centralization conundrum - there are benefits to both, it's just where one puts the balance line.