People always say this but I'm now a phd student and the only time I ever had a class where we used a professor's book was one class where the book was actually out of print so he just gave us photocopies of it.
I TA'd for a professor who wrote a book and used it for his own class. The bookstore could not obtain the book in time for the beginning of the semester, and I suggested we just photocopy the first couple chapters for the students until the books came in. Apparently the publisher (who owned the copyright as part of the contract) wouldn't allow this.
Also, for the post higher up about professors being happy to write new editions--not only are their royalties surprisingly low, but often in the initial contract they agree to produce new editions at the request of the publisher. So they often have little say in whether a new edition is printed or not.