As a general rule, 35% of the cost of the book is for printing and paper. Then there's 5% to cover distribution (to the retailer, not the customer). The retailer takes about 30%, which pays for his staff and shelf space. None of those costs apply for a digital book, apart from a minuscule amount for listing it on a web site. So you could cut the cost of a book by 70% and make the same profit.
I've seen it argued in several places that you could reduce the cost of a digital book to a flat fee of $1.99 and you'd still have a viable business. Probably, from the publisher's (and author's) point of view, a more viable business, as people would buy more books at that price. What's more, since you don't have to worry about print runs, overstocks and remainders, you can publish more niche books and expand your inventory. You can't do that right now, because of the fees Amazon and the like charge, but let's assume for the next few minutes that it could be done.
Then what I'd like to see is this.
I pay $20 a month, and can download as many books as I want. Absolutely unlimited. But here's the catch. If I stop paying my membership, those books are no longer available to me. It works just like Netflix or Lovefilm. I can get whatever I want, whenever I want it, as long as I'm a member.
Practically, I can only read a book a day, and that's pushing it. More realistically, I might get through 15-20 books a month. So even if I download hundreds or thousands of books in one month (equivalent to loading my Netflix queue with hundreds of movies), I won't be able to read them all for $20. It'll take me all year. So I'm not paying for the actual downloads, I'm paying to read.
Sure, this isn't the same as owning them. If I stop paying my monthly sub, I "lose" all those books I've "bought". That's true, but frankly, I don't want to re-read 99% of the books I read. So maybe the system could allow me to keep any book I like for an extra $1. It's just like using a library (which I do, much more than buying books anyway), except that I can take out as much as I like, I don't have to go there, there are no late fees or due dates, I don't have to worry about whether they've got the book in stock or how many copies they have, and I pay for it directly instead of through my taxes.
In fact, I'd go so far as to suggest that one day, I'll be able to get a single media subscription covering books, movies, games and music. Pay a flat monthly fee, and read, watch, play or listen to anything I like, when I like, where I like. I'd sign up for that in an instant. Wouldn't you?