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I don't see the Netflix style unlimited service or any kind of rental working out. The emusic.com model makes a lot more sense for the medium: a heavily curated, extensive but not universal catalog, where the on-site content and the discovery service are part of the appeal, and tiered monthly fees allow you to download anywhere from 1 to 5 books per month. It may not be your sole source of e-books, but the psychology of knowing you could be paying less per-item if you just get x number of items per month, together with knowing you'll find books you wouldn't even have known about otherwise, will get a lot of people past the absence of NYTimes bestsellers.
Build up the userbase with your "indie" catalog (drawing on many small publishers in many genres), and eventually you'll get some bigger fish and find publishers and authors coming to you.
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