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Retailer-set pricing is a formula to ultimately eliminate publishers and reduce writers’ incomes.
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That's funny, it hasn't done that yet in however many centuries of retailers setting their prices for pbooks.
Ebooks themselves may eliminate publishers, but only if those publishers are stupid and keep trying to insist that all automobiles carry a mandatory buggy whip instead of retooling to make leather seat covers and dashboard trim.
The publishers are used to being in control. They're used to being able to dictate terms to authors, to retailers, to consumers ... to everybody. They're used to competing only with each other, and only on the basis of how good they are at picking books that can be marketed effectively. They're used to one of the major, if not
the major, influences on the sales of a book being how much marketing they choose to put behind it.
Now they're looking at a world in which anyone with a word processor can self-publish with little more effort than I'm expending on writing this forum post. They're looking at a world in which competition is no longer a genteel matter between them and their fellow publishers but a cutthroat battle with everyone who has a book to sell. They're looking at a world in which authors' websites, social networking, automated recommendations, and word of mouth (or word of forum) can have more of an influence on a book's sales than publishers' marketing campaigns. In short, they're looking at a world in which they actually have to compete in an open market, a world in which they have to actually add value to their product rather than just controlling the existence of that product, and they're scared (stuff)less.
So they've got two choices from here: One, they can learn to compete, really compete. They can learn to add value to their product. They can use their tremendous resources to make better ebooks, and give authors, retailers, and readers a reason to do business them instead of with J. Random Author with his book and his website and his "buy with PayPal" button. Or, they can form cartels, spew propaganda, threaten and bully and lie, to try to stop or reverse progress and go back to the environment they're familiar with, the one they've evolved to exist in: that past world where turning a manuscript into a book required a multi-million-dollar company instead of just a copy of Sigil, where getting that book into a reader's hands required first getting it into thousands of physical bookstores instead of merely uploading it to Smashwords.
Looks like they've chosen option #2.
In the short term, they might even pull it off. Buggy whip manufacturers might have, had they organized like publishers, made buggy whips mandatory on automobiles, too. But only in the short term. In the long term, someone's going to look at all those cars driving around with buggy whips and say "What were we thinking?" Then they'll no longer be mandatory -- and other companies, smarter companies, will already be dominating the market for leather seat covers and dashboard trim, leaving no room for the old buggy whip companies at all.
What a waste.
What a shame.