Cinisajoy, I think your post makes a few good points, but one in particular: The self-publishing landscape is still in flux. The crowded Internet with its often mob-like mentality seems likely to keep it that way.
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It appeared that in the early days, more authors cared about their books and wanted to make money. I should mention most of the original 25% have gone on to make extremely good money.
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and I notice the link this makes between "cared" and "wanted to make money". This implicit link is one of the reasons why so many readers are wary of trying free books. For good reason, of course, because anyone serious about making money needs to care about the quality of their product. This doesn't mean all people offering free books don't care, but the point is that they don't have to care, so the odds are many won't.