Most of existing on-demand stores for books, shoes etc. offer you only few choices. You can't really decide every detail of the product. The process of designing in a restriction free system can't be done by checking boxes and insering measurements. It has to be either a dialog between the designer and the producer or a detailed sewing pattern, together with drawings etc.

I think this idea is only limited scaleable - I presume it is not much cheaper to produce one unique item or 1000.

On the other hand, I could see something like threadless emerge for designs in general: They'd partner with "real" designers and produce small series of each piece and sell it until it's gone. Something in between etsy and threadless.