That is how I published my PhD. The "publisher" took a small cut to get it an ISBN and to have it added to some catalogs, but proposed a very reasonably priced printer that he has a deal with for it. (Physical copies were mandatory.) All rights for electronic publishing remain with me. The book itself is LaTeX, and for proofreading, I paid $1000 to a lady that offers this as a service and did a pretty good job of it. A fiction author could possibly get away with having some loyal fans do the proofreading for free in exchange for early access. And these days, a fiction author does not need to produce physical copies, those that want one could easily be served by book-on-demand systems.
The only people that will suffer under this system is those that produce trash (not the genre) and the publishers that have become superfluous. Of course, editors still have value, and some authors will want to retain the services of one. But there is absolutely no reason to not hire them directly, either for a cut or for a fixed or per-effort fee.