Excellent post, David! Also: "it behoves someone to pour a touch of cold water on things. Oh go on then. Let it be me." - classic Hewson!

Barry and Joe Konrath are in atypical positions as proselytizers for their position, Konrath because he's been banging the drum so long and so loudly on this that he's become the figurehead of the movement, Barry because he's an established bestseller who can enter the epublishing market with a solid fanbase and easy access to publicity. While Stephen King really should plunge whole-heartedly into self-publishing, I think midlist or unpublished authors would be wise to be more circumspect.

But really, I don't know - I have no clue what the future will look five years  from now. The biggest issue, I think, will be competition: as self-publishers flood the market, supply will soar, flooding demand. Prices will (have already) take a hit, as established writers compete with beginners offering their work for free. But hardest of all will be establishing your own brand in a sea of hundreds of thousands of other writers. I genuinely believe that marketing/branding will be the biggest challenge here, and it'll be increasingly different not only because of the competition, but because of the dilution of traditional publicity options - fewer newsprint pages with book reviews, a huge proliferation of book bloggers etc.

Still, while self-publishing/epublishing represent a problematic future, the approaches of the various legacy publishers to epublishing seems just as problematic. They really seem to be tightening the screws on authors in terms of rights and royalties. And as revenues from traditional publishing has withered, their promotional services for authors, always pretty weak, have become almost risible.