I have a hard time imagining anyone with decent taste in books being willing to spend hours each week voluntarily sifting through the slush pile without compensation. And I think it's the sort of activity that one gets better at with more experience, too. I like the idea of professional editors filtering the content I select from to read, even though it's made it harder for me to get into print myself.
I think there are opportunities for different ways of organizing and compensating editors, however. With ebooks and/or POD, perhaps the editors could get a cut of books actually sold, rather than being paid a salary. Editors could form coop groups of editors with similar taste in books, for branding purposes. Readers could rate or group editors, and look for other editors rated highly by people who like the same editors the reader likes. I think it has possibilities.