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I think the main problem for indie (and online publishing in general) is matching up authors and readers -- there are almost too many options for readers to choose from.
"Trusted sources" (bloggers, reviewers, participants on message boards, etc.) will help narrow the "what do I read next" dilemma, not unlike news aggregators do now for web-surfing.
As brick and mortar stores fall by the wayside, the power-brokers in the new world of publishing are going to be the social communities, bloggers and reviewers...sites like MobileRead.com, the various Kindle boards, etc. will help make the future stars of publishing.
Yes, there are many amateurish works being published independently...just as there have always been plenty of "not ready for prime time" works published by both major and small presses.
I went indie for two reasons: 1) creative freedom, 2) a better business model.
1) I enjoy the freedom of being able to write and publish what I want without interference from a publisher. I enjoy letting readers decide "what is good" (and I have confidence in that process). Having worked inside publishing companies, I know better than to have any confidence in the corporate network of infighting and arbitrary decision making. It is a wonder that any of them make money the way some of these companies are run.
2) As an independent ebook author, I can make a respectable income on far fewer sales than I would need by going through a traditional publisher -- so even if my work is "more niche" than a mainstream publisher can be bothered with, I am still ahead of the game. And yet I have the creative freedom to do what I want.
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