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Competition keeps businesses honest. A single bookstore would concentrate too much power in one business. A monopoly can charge whatever the market will bear. They just decide that they can maximize profits at X price, and set the price there. Competition drives prices lower, as competitors will lower their price to take business away from competitors.
The selection would suffer under a monopoly. Why should a monopoly bother to provide a wide selection of books, when the customer's choice is only to buy there or to do without. A monopoly would have total censorship powers. With competition, one seller can decide what books to stock, and another seller can make different decisions. The books still are available somewhere. There is no difference between a monopoly not stocking a book and the book being banned, the effect is the same.
Why should a monopoly provide good customer service or good quality? The customer has no other choice, why treat the customer well.
The more competition, the better. I like my Kindle, but I will buy at Smashwords if I can.
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