As a novelist who has just received the devastating news that her German publisher has decided to drop her, and is now bricking it that her English-language publisher might follow suit, I can tell you that the answer to your question, Nicholas, is YES YES YES.The Bitch can agree, for she can bring for your delectation the experience of having a novel she had written discussed by a literary agent primarily in terms of whether or not it was 'a Richard and Judy' book (and thus saleable to publishers).
Over at The Reading Experience, Daniel Green tackles the subject of the increasing commercialization of publishing with his customary wit and insight:
According to the Book Industry Study Group's Albert N. Greco, "The book business has been around for centuries. It's a mature business, and it's hard to get tremendous growth."
This another way of saying that, historically speaking, the book business has been very successful. It's hung around a long time and mostly managed to satisfy its customers, the identity of which--readers--it has effectively targeted and the outer boundaries of which--extending to and stopping at nonreaders--are generally well known.
It seems to me that those involved in the book business as it is currently configured would do well to keep Greco's warning in mind. "Tremendous growth" beyond the confines of those human beings who read isn't just unlikely... Steady sales of good books among serious readers seems to me a perfectly sound business strategy. Otherwise, produce some other piece of merchandise for which "tremendous growth" is not only possible but is its primary reason for existence.
Finally, before I disappear for a weekend to Paris, here's blogger Norm responding to the undervaluing of literature displayed in the reaction by some to Rushdie's knighthood, by setting up a short-short story competition.