Long live arXiv.org, paid publications should be totally disrupted in 2020.
Gave up on arXiv because of that. I use overleaf to avoid all the Latex issues, and I'm absolutely not interested in supporting something that expects me to get back to wasting time on fixing latex issues instead of producing content.
Another tip if you're using overleaf: make sure your bibliography related warnings that overleaf points out, are gone too. Overleaf is resilient to these but arXiv is not.
The argument from authority (e.g., publishing mafias) fallacy is ripe in academia.
Same situation with textbooks. Besides profit and trying to become famous, there's no reason why a professor should publish through a traditional imprint or publisher (Pearson, Cengage, McGraw Hill, Wiley, Taylor and Francis, Elsevier, etc.). LaTeX, a Creative Commons license, and a homepage at the university department (and perhaps a GitHub/GitLab repo) is all a professor needs to make textbooks available worldwide.
Writing and editing a textbook is indeed a hard task. Yet, having the end result behind paywalls and arbitrary pricing isn't worth it.
I believe the reason Arxiv is not trusted in some fields is that it's seen as a loophole that allows bad articles to avoid the filter of peer review and see the light of day. It would not be a problem if Arxiv was full of such articles, that would never cut it in an actual publication, but such articles are mixed with many that are eventually published and that just adds an amount of noise to the process that makes it hard to be sure what you're reading, especially if it doesn't exactly match your expertise.
In other fields, e.g. in machine learning, putting your paper on Arxiv is de rigeur although of course that means anonymous reviewing goes out the window, so there's legitimiate concerns there also.
I don't see this is a problem as, if you want to cite an arXiv paper, the responsibility on you increase, to ensure that the methodology etc is sound. This would be a better state of affairs than the "you must cite this highly cited paper just because it's a highly cited paper" situation we're in now.
While it's easy to argue for textbooks to be openly available (just like education should be), there is no single reason for research papers not to be, since they purportedly advance science and human kind itself, and there is the demand of originality (if I can't access it, I can't establish if someone has not done it already).