Interesting question.
Now that you've mentioned a figure, pdr - $6,000-$12,000 - it certainly sounds more like vanity publishing than cooperative. Of course, it depends on the number of copies you get for that kind of money.
In the particular circumstances of the New Zealand market, it doesn't surprise me that this scenario exists. A population of only 4 million makes fiction publishing a difficult and risky proposition. Even here in Australia, with a population of 20 million, many of our publishers are marginal operations, especially in the current environment where worldwide a relatively small number of (mainly overseas) blockbuster novelists are claiming the lion's share of book sales. As a result, the number of new fiction titles published here each year is depressingly small. This is despite the fact that per capita, Australia and New Zealand are the biggest book readers/buyers in the world, trumped only by Iceland. (Something to do with living on an island?) Another factor is the long-term distribution stranglehold that for historical reasons British publishers had on Commonwealth countries, followed by more recent trends towards global aggregation in the publishing industry.
For that kind of money, one could self-publish and be in complete control, in fact for rather less dough than that. Perhaps more important than the definition of vanity vs coop in this case, however, is the likelihood of commercial success by publishing in either manner, and that all comes down to distribution. If the publisher in question is a bona-fide publisher with a sales/marketing force and established, effective distribution channels, going with them, even with (gulp) that kind of outlay, could still be a better proposition for one-who-is-determined-to-be-published-locally than trying to go it alone.
It's quite possible in this case that up-front payment by authors to secure publication of their work is a reflection of market circumstances rather than a manifestation of the dreaded 'V' word. And it should be easy enough to check the pub house's credentials and distribution arrangements.