Currently reading - The Fixer by Jon F. Merz (e-book)
On Monday, former Curtis Brown agent and current author of Jacob Wonderbar and the Cosmic Space Kapow, Nathan Bransford wrote a thoughtful and fairly balanced piece on the current paper versus digital controversy. (Go read it. I'll wait.)
After a couple of days contemplating what Nathan said, I believe he left out a few important pieces of the puzzle.
Folks like Amanda Hocking and Joe Konrath do have overhead. Amanda has hired editors for her works, but she designs her own covers. Joe trades editing with other writer friends and hires a cover artist. Depending on your talents/desires, you're going to have some overhead putting out your novel as an independent. Granted it may run only $100 and a lot of favors traded, but do not ignore the non-money cost of doing business. Trust me, the IRS won't.
Also, Nathan implies in his piece that all of Amanda's and Joe's books are $0.99. Amanda and Joe are treating their products as any other retailer would. They've set one or two books at $0.99 as loss leaders, just like Barnes & Noble have Snooki's book prominently displayed as you walk into the store with 40% off the cover price (or they did the last time I was in my neighborhood store). Amanda and Joe then have the rest of their books priced higher (all the ones I've checked out are $2.99).
Lastly, I don't think Nathan stressed enough how much work these two people have put into their careers. If you've ever owned your own business, you know that 'work' isn't 9-to-5. It's 24/7. In both cases, their 'overnight' success took a decade or more. If you plan to follow the indie path and reach a certain level of achievement, get that through your head now!