In 2009, when I decided to self-publish, the tide of opinion on the writing blogs was that authors who chose to self-publish were some combination of: (a) inferior writers, (b) lazy, (c) too arrogant and/or impatient to play by the rules. Traditionally published authors smirked. Agents harked about the importance of letting "the process" work. Publishers, as far as I could tell, were evidently not paying attention at all. I felt kind of bad about it (because normally I'm a "play by the rules" kind of person), but I decided to self-publish anyway. It felt right for me.
Throughout 2010, the numbers of indie books self-published or published by small publishers on Smashwords grew, and they exploded in 2011. In mid-2011, I think the tide turned. John Locke and Amanda Hocking were making serious money selling indie-published e-books. Amanda Hocking ended up with a seven figure publishing contract and Locke evidently signed an unusual but cool deal of his own. Agents are marketing their clients' work on Smashwords. Free and cheap e-books are everywhere. More and more of the writing blogs are not only okay with indie publishing, but they're encouraging it.
The consensus seems to be that the good stuff will rise to the top. I think that's absolutely correct. Maybe we should view the universe of self-published books as a gigantic slush pile that is open not only to publishers and agents, but also the reading public in general. It gives authors whose work may not be "commercial" the opportunity to connect with people who might actually like it. The really good stuff will go viral, and the traditional publishers can skim the cream that make it all the way to the top.
That can't be anything but good for everybody.
Some super successful authors will hit the publishing lotto and make enough money to support themselves on their writing alone. Good on them! Most of us will limp along with minimal sales. But speaking for myself, any sale at all is pure and utter BLISS. Best of all is getting occasional feedback from people who read the stories, and like them, because for me writing is for the purpose of sharing stories more than it is about making money.
(Not that I would turn down money, mind you.)