Mathew Ingram adds some interesting nuance to the Seth Godin reaction:

Not every author or artist has that ability, and not every book is going to find an established audience that way. There are still going to be mass-market blockbusters in publishing, just as there are in movies and music, where the marketing machine goes into high gear to reach as large an audience as possible. But for established authors and artists who specialize in a particular niche, connecting directly with readers or fans can be a far better approach than relying on the traditional infrastructure of the content-distribution industry. At the end of the day, that is a good thing for fans of both books and music.

via Seth Godin Drives Another Nail Into the Book.