Someone asked this question recently on a networking site I frequent. And I've seen a lot of people ask similar questions. They're good questions, asked by good people who have a love of good stories in their hearts. There's a fear that, without gatekeepers managing what is produced, tons and tons of badly written books will flood retailers, making it impossible for readers to find the good, well written works. These are important concerns, and I wanted to address them.
First off, it's a fallacy to think that publishers are primarily concerned with publishing quality literature. They're primarily concerned with producing books that will sell. A certain minimal level of quality is part of that equation, but it's not the prime motivator.
What I think we ought to do? Let writers publish what they want. Give readers a robust sample of each work to read before buying. Give readers a full money-back guarantee on books they buy, so if they buy a stinker they can return it. Give readers good tools to review, comment on, and rate books. Give readers excellent tools for searching through books to find the ones they want.
In short, keep doing what's currently in place for ebooks.
Yes, anyone can publish. But there's no deluge of self publishing. Amazon (where virtually all self or trade published ebooks go, even if they're not being sold anywhere else) will put up between 400k and 440k new ebooks this year. Trade publishers are expected by the AAP to produce 360k new titles this year, most of which will have an ebook edition. So self published ebooks are still a minority on the biggest book retailer in the world.
And precisely because readers have excellent search tools, the ability to download and read large samples at their leisure, and the ability to return ebooks that are real stinkers, Bad Books Are Not Selling. They just aren't. There are books selling which aren't to my taste - and probably some selling well which aren't to yours. But I doubt there are many, if any books selling a lot of copies (i.e. beyond friends and family) that are truly bad.
Not all great books are selling well. But very few if any bad ones are selling well.
It's a different world. Writers need to be cognizant of marketing online, and what's involved - they need to be a Presence. Have a positive image on the internet, build a rep for clear and powerful writing. And writers need to produce bunches of books, most of the time. One often is not enough anymore - especially not in fiction, where readers more than ever are flocking to writers who have multiple books available. More work means more payoff on the investment of time spent reading a book (checking out the author to see if you like her work). If you like the book, would you rather that writer have twenty others you can read and probably enjoy? Or none?
Quality editing still matters. People don't really care about the occasional error. People care a lot about seeing errors on every page. And that's not all editing does, either - I almost used "lot" twice in that last sentence, and self-edited the second one out, restructuring the sentence to make it work without the second "lot". A good editor will see when you're making mistakes like that and help fix them. Goodness knows, I have enough quirks like that in my own writing! =)
Quality production still matters. AIDA is a concept in marketing. Attention, Interest, Desire, Action. An excellent cover helps grab attention as a potential customer scans the books in his favorite genre. The goal is that the reader clicks the link to see the book's page. Then, the good blurb (and ranking/reviews) help create interest - the goal here is to convince the reader to download the sample. The sample generates Desire - ideally, by the end of the sample the reader is so hooked that she immediately clicks the "Buy Now!" link at the end of the book, and you've sold another copy (Action).
EACH stage of the AIDA process requires quality. Failing anywhere in that chain creates a break that allows potential buyers to slip away. So yes, quality is as important as ever.
I think it's important to remember that in the end, the reader is the only audience who matters. You are writing to the reader - writing something that will touch, educate, inform, or entertain the reader. Accomplish that, and produce the work in a quality manner. Anything beyond that is a matter of choice.