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Publishing houses do two things: first they help get a manuscript into publishable form, this includes both substantive and copy edits, as well as proofreading as well as things like typesetting and cover art; and second they get the book into the trade distribution channels. All of this takes time, so if the author does it they will end up writing less.
As a reader, I consider that a fail.
Publishers do important and valuable work, and they deserve to be compensated too. The vast majority of authors who do well with self-published low-cost ebooks are ones who already have a fanbase. People already know who they are. You can find JA Konrath in the bookstores, and I first ran into Michael McCollum's books about 20 years ago in paperback.
It's a great option for midlist authors to keep their backlist available, but not quite so useful for people just starting out.
Publishers are necessary, and they're not evil. I've met several and all the ones I know are book people. They do however, want to make enough money to keep the books coming.
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