Kachka goes into recent book publishing history in detail, commenting on specific events such as corporate moves, firings, resignations, etc., as well as specifics of deals. One thing that becomes clear is how much book publishers in quest of best sellers gamble in the current business model. As an example, the author of Cold Mountain got a huge advance for his second book, but it enjoyed only moderate success. Here's a quote from Kachka: "Marketing a book these days is like playing a slot machine; hitting one 7 won’t get you a dime."
He also mentions the e-book market, and comments on how Amazon sees traditional book publishers as their competition, while publishers in turn, fear that Amazon will corner the e-book market and leave them with no choice but to do business on Amazon's terms.
The article closes with a list of "Books Gone Bust" where the advance was way out of line with what the book sold, and then another list, headed "Place Your Bets" of books coming out where the advance was substantial and no one knows yet how they will do.
The GalleyCat post had reaction to the article, which ranged from comments that considered it just the same old gloom and doom, to those that said book publishing as currently constituted deserved to die.
I still say that it's not death we're seeing but evolution. It may well be that the Kindle is the asteroid in the sky for book publishing dinosaurs, but publishing isn't immune from change anymore than anything else is. Look at cars. Have you tried to buy a new Studebaker lately?
Evolve or go extinct. Those are the choices.