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I'm with Xenophon. I've seen slushpile work. (I've contributed some of my own, but not at Baen.) I don't know if we still need publishers, but we sure need editors. I particularly like being able to get used to an editor's style and knowing that I'm likely to like most of what they publish.
To the description of Baen books above, I'd add that many of them tend to be "military" stories. This is unfortunate from my perspective, as I love the Baen policies around ebooks, but don't care much for military fiction. (Yes, I know there are exceptions. I own most of them already.) Another common quality is humor. But if you're looking for serious philosophical SF or fantasy, you want a different publishing house. To my mind, this is actually a good thing, even if it is inconvenient for me regarding Baen. I like knowing approximately what I'm going to get from a publisher.
Portal sites like Amazon actually handle making book recommendations fairly well these days, so that aspect could possibly be replaced, but the task of filtering the slushpile and working with authors to improve the writing of those works worth publishing still needs to be done. Maybe there's a place for freelance editors out there.
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