Somewhere there is a limit to how many authors can make a living out of their IP alone. An increase in the number of authors means that less of them can afford it, and the same thing happens when there is a hugely popular book.
According to
wikipedia there are 1882944 new titles published each year. If on average the book consumption would be 1 book/month/person and the average price would be $10 that means that each new title would get $446110 per year. If only 20% makes it to the author, then the author could make $90k per year if they write a new book each year. This would mean that we can sustain the current authors as long as we don't spend the money on PD books and the revenue is distributed evenly.
However if the numbers are closer to only one in 10 people spending on average $120 per year on books, that means that authors can make on average only $9k per year.
It seems like time an effort is spent to get the current readers to spend more money on books instead of getting more readers. The libraries-publishers situation gives the best example of this. Instead of facilitating access to books to get more people reading the publishers hinder it in hopes of getting people to pay for more books. The option for consumers is to go for cheaper or free books. What is the option for authors?