Major companies controlled major distribution. Now they don't. Of course an empire built around a competitive advantage that no longer exists is going to necessarily shrink.
It would be folly to think otherwise.
The flip side of this is that there will be more and more and more small, "vanity" books being sold in small quantities. Disintermediation is about the long tail. The little guy still has very little chance of scoring a major success, but lots of people will be able to write and make a few bucks for it.
Being a part-time author is now a serious proposition.
That said, sure, the concept of books is in serious need of help and e-readers including kindle do help some. I know several people who hadn't read a book since high school but suddenly got used to reading on kindle/nook/their laptop/phone and suddenly trade suggestions and (gasp) purchase actual books. This is a positive, seeing as getting them to sign up for a library card or even giving them (no strings) a physical book to read was usually met with suspicion.