I was active in the recording industry back at the turn of the century (I love saying it that way).
Needless to say, the internet was just beginning to act as a distribution and promotion channel for musicians then. The recording industry doubled down on their anti-competitive, ever-chasing-the-blockbuster business model, as they have done many times since.
The industry failed to grasp the importance of the internet, and now there are many, many examples of artists thriving financially WITHOUT a major label, and with audiences in numbers the labels normally wouldn't have bothered with. It's almost the economics of scale in reverse. Recording costs have PLUMMETED thanks to digital recording and project studios. Distribution costs have plummeted, and now promotion costs (thanks to social networking and "going viral") have plummeted. Put it all together and as an artist, you no longer need someone else to "manage the business end" for you.
Marketing isn't a messy, bothersome business, but merely a way to connect with your fans. Distribution can be handled on iTunes, eMusic, and other sites with ease. And if you love your music, you can put together a fairly cheap (compared to the costs just 10 years ago) studio in your basement capable of producing a quality that people are willing to pay for.
... it's just wrong, man. Whoever thought it was a good idea to make a cartoon video character out of a guy who hated his own fame, struggled with drugs, and then gave a shotgun a blowjob... is an idiot.
Publishers are scared of online distribution for the same reason record labels are scared of it. Because when you pull more and more of the roadblocks between content CREATORS and contents CONSUMERS out of the way, they become obsolete. Indeed, they should adapt or prepare for the end. Should ebooks cost less? Absolutely. An optimized business model that delivers content online is vastly more efficient than an optimized business model that is binding paper books and shipping them around the country so consumers can get in their cars and drive to a book store, browse through stacks and buy what they want... if it's in stock.
Obviously, they have to get pricing right. But consumers are aware enough of the pricing signals they are getting to know when they're getting gouged. And the economic incentive for online book sellers is to drive volume through lower prices for ebooks. That's going to be a hard incentive for publishers to thwart.