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The discussion at hand seems to be focused on only one part of the ebook market. Let me put on my "professor" hat and elucidate...
The ebook market breaks into 3 portions.
1. New creations coming out.
2. Old creations that aren't yet legally free.
and
3. Old creations that are legally free.
All the discussion is about #1. Will quality creativity be killed by the inability to make money via the old model. But that leaves out all existing art under #2 and #3. Like it or not, new creators, they are your competitors every bit as much as your current creative competitors. And their costs are already sunk. (I.e. whether or not money is made of those works, in essence, immaterial, because they have already been created and release into the public world.)
How do you compete with them in the P-book world. You compete by having them disappear! They go out-of-print, and are no longer on the new book shelves as a competitor. And it used to be that it was hard to find an individual title, used, providing an additional protection. Even ignoring ebook piracy, you can now go onto the internet and find just about any book you want, used, online for purchase and delivery. That's competition that didn't exist 20 years ago.
Now, let's look at item #3. The public domain. It has different definitions in different localities, but I'll make an low-ball guesstimate of 30,000 titles. At 300 WPM reading rate, that would work out to 10 year of reading 24-7. Since that's impossible, say 12-7 and 20 years. All of it free - by definition.
Number #2 - existing works still covered by copyright is where the crux of the issue is. The number of books involved is well into the 6 figures. As they get converted into ebooks, legally or not, they provide even more competiton to current creative writers. And the competition is fierce - Chandler, Hemmingway, Agatha Christie, Heinlein, Asimov, Clarke, Louis L'Amour, Ian Fleming, Forsythe, Steinbeck, and the list goes on and on....
#2 and #3, readily available, are enough to destroy the publishing industry as we know it. Nobody could read them all in a lifetime. #3 is free, and #2 is steadily becoming so, albeit illegally.
This is your reality, current creative writers. The old ways are dying. If you write strictly for money, (and there's no sin in that) you need to retread into some other career that pays better. If writing is your passion, go ahead and write, but don't expect you'll make a living off of it in the long haul.
As for me, as I fill my liseuse with 3-4,000 titles, when I get done in the next few years, I won't be getting anything else, free or not, be cause I'll never get around to reading it.
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