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Cory Doctorow is one of the early authors doing that experiment, free at the same time as paid sources. I haven't heard lately how the paid side is doing for him. Hopefully well.
Put me down on the "publishers days are numbered" side. They are not adding enough value.
As noted before, editing and even marketing can be contracted by authors. Printing is an issue where publishers have economy of scale and distribution channels but it is a diminishing issue, more sales going digital. And geez, printed books I read contain so many errors (not just spelling, say a mistake about a car or gun model) that I frequently e-mail authors. So you can't point to how good traditional editing and proofreading are.
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