BTW, did this post ever happen? (Yes, I realize this post is four years old. That just means that if the blog post did happen, it's buried too deeply in the archives for me to find easily..
And with LindaJeanne, I'm now burningly curious about Old Hack's idea four years ago.
I only just saw these comments--sorry!
Yes, I did blog about it. The gist was that if trade publishers were to provide what would essentially be vanity publishing services they could only do so if they were completely upfront about the chances of success, and the differences between their trade and vanity arms; but that they could provide added value by encouraging their editors and designers, etc., to offer freelance services to the paying authors, probably through a central website-and-forum thingy. The publishers could take a small commission from the editors etc to cover their costs; and they could even offer some distribution services for any books that seemed promising.
They could also offer things like editorial reports on people's manuscripts (all interested authors--self or trade published--could volunteer to give these, and give details of the fees they'd require), again with a commission to the publisher.
There are all sorts of services that could be provided, reasonably easily, and at fair cost, in ways that could help writers improve and publish through the scheme if they wanted to, without anyone being exploited. But so far the trade publishers which have gone forward with a "self publishing" service have chosen to work within the bounds established by vanity publishers, rather than creating something newer and more flexible.
I'll stop ranting now.