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The key question is how many backlist books can they sell...many backlist titles that are out of print probably only sold a few thousand copies in the first place, so publishers may be looking at only a few hundred (or maybe a thousand) sales. I'm not sure if that's enough to make a profit or not, especially if they sold the books somewhat cheaply.
Assume a publisher asks $5 for an e-book of an out-of-print backlist book. 30% off the top goes to the retailer, and 25% of the publisher's receipts go to the author (under a common royalty system; the author may make more under others), leaving the publisher with gross revenues of $2.60 per book. So if the book sold 1,000 copies in a year, the publisher's revenue before costs would be $2,600, spread out over that year. I'm not sure what the costs of converting and making the book available for sale might be, but it seems like they might be able to make a profit on 1,000 books. But maybe not on 500 books...
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