|"Ancient of Days" - William Blake|
I think this is increasingly going to change - and the great thing about it is that it's actually a very old tradition. None other than Marcel Proust got his start by, (vanity publishing alert!), paying a publisher to put out SWANN'S WAY, and he was by no means alone - just ask Ben Franklin, William Blake and many others.
Major publishers have been a tad wary of literary fiction for some time, and while reputable small presses have picked up the slack, when I was an agent I saw too many great literary books languish for lack of a publisher.
The infrastructure is developing - already you have thriving online blogs communities devoted to literary fiction, like The Millions, HTMLGIANT and Bookslut, and with review space declining in print anyway, who's to say that you have to have the imprimatur of a publisher to find attention.
You still seem need a publisher to be nominated for major awards--to my knowledge, a self-published book has yet to be nominated for a Pulitzer or National Book Award or NBCC Award--but could that really be far behind?
And I blogged recently about my former client C.Y. Gopinath e-publishing his novel THE BOOK OF ANSWERS through Smashwords in the US (it's published by HarperIndia in India), and I think it's a model for the future. There is great literature out there and self-publishing isn't just for genre fiction anymore.