I think the article was spot-on about following the Waterstone model of making it a chain of hyper-localized stores, instead of a homogenous behemoth trying to be everything to the masses. Book readers are thinkers, and are turned off by mass marketing.
It's like how local coffee shops continue to survive and thrive, in spite of the ubiquitous presence of Starbucks. People like local, special things. What people on 35th Street in Chicago want to read is not the same as what people in Haight/Ashbury in San Francisco want to read.
If one wants to explore something from the other, there's always in-store ordering, and online. Plus the more-popular-than-ever-in-spite-of-the-zeitgeist libraries.