Yes, I think offset is really the way to go. Sure, it means you're dropping $3K to $5K for a print run but:
a) that's the only way to get the unit price down to where with distributor/bookstore discounts there is any margin left to make any sort of profit; and
b) if you don't believe in a book enough to be willing to invest a minimum of $5K-$7K (author advance, editing, compliance elements, layout and design, offset print run, marketing components) then why even bother to do it at all? Either wait to find a book you believe enough to invest in or find another line of work.
It's possible to make money with print on demand (POD) but the issues are a lot trickier as you're heading down the road of time-consuming & labor intensive single copy sales as opposed to being able to move hundreds/thousands of copies at once through a distribution network. Plus, the pricing quickly gets out of whack because your retail price will have to be higher to cover increased printing costs so then it becomes easy to price yourself out of the genre you're publishing in. And, a rule of thumb is that if you anticipate selling 500 copies of a title, you may as well go offset because you can get 2000 copies printed offset for the same or less as 500 POD copies. And if you're planning to sell less than 500 copies--unless it's some sort of special limited edition--once again you're back to having to justify spending all that time and effort to at best, if you're very lucky, break even over the long haul.
Just a side note, a publisher I knew when I was first getting started out said that she calculated retail price as a function of multiplying the unit printing cost by ten. So, if she had a trade paperback that was $14.95 it meant she had printed enough copies offset that the unit cost was $1.5 apiece. That way, after all the various discounts--and looking at 30%-40% returns from bookstores under typical circumstances--she might, just might, have a slim profit left over when it's all said and done.
Finally, to make a long post endless, ebooks are rapidly turning into the next big thing with Amazon, Borders, Barnes & Noble, and Apple generating rapidly more revenue from these sales so I think it a carefully thought out combination of print and ebook sales will drive books into profitability in the future.