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The subscription model appeals to some people who only read a book once. It pretty much competes with libraries.
A bigger problem in monetizing books is the sheer amount of content coming out - which Nate addressed. For the last few years I have been reading (in addition to rather than in place of my other genres) a whole lot of superhero fiction. That stuff used to not get published much, even when it was decently written.
The gatekeeper function of publishing houses is gone. I will continue to point people to indies and fund editing and cover art through kickstarter. I don't want less content, and sites like goodreads help me fin authors who write stuff I like versus things I don't. Reading has never been better.
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