I agree that blogs and other electronic writing tools are opening up a great deal of options that the traditional, physical publishing media does not allow.
But I think it also changes thing with regard to simple quantity. Physical publishers can only publish a limited amount of content, and each and every item published is a gamble of sorts. Web-based publishing has nearly zero incremental costs in publishing new material and allows for material deemed marginal to be published anyway. Without the scarcity of the physical, more content will be published through publishers.
In addition to this extension of the traditional publishing model, the decreased publishing costs have made it possible for almost anyone to publish their content. This is both a good and a bad thing.
