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I think the publishing industry's problems have more to do with a general decline in reading as a pleasure activity, which has many causes but certainly the explosive growth of TV, film, internet, and other media is a big factor--competition for the leisure and entertainment dollar (and time). In my little corner, the SF world, it has become harder and harder for even previously successful midlist authors to keep a decent audience. And this at a time when SF in the visual media is soaring. Attention spans don't support the reading of thoughtful books as much as they used to. (I feel it myself in my own reading.)
Another big factor, according to those who know, is the huge consolidation within the distribution network--with over a hundred distributors shrinking down to just a handful. Everything is done by computer. The days of the local or regional rep or delivery guy who knew his own local market are gone. More power in a handful, and thus more bias to the assured big-seller. Similarly, every time I hear of yet another publishing house being gobbled up by a larger corporation, usually held by overseas investors, I wince--because there goes another bit of diversity, and probably a few hundred publishing jobs held by people who love to make books.
But I'm sure there are many other reasons, as well.
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