Well, I remember the monetary pain of buying textbooks, and I know a lot of kids in college today. To them, the costs of textbooks are anything but chump change.
There is indeed value there, but of course the costs for this sort of work, amortized over many copies, it comparatively tiny. And I would point to the work of places like the California Open Source Textbook Project and Flat World for examples of how very good the content can be even though produced by "alternative methods".
Like prefect42 notes, the actual reviewing that filters our the cranks and such is *also* done by the academic community, usually at no charge to the publishers.
You're quite correct, of course. I've interacted a lot with GA Tech folks over the years, and it just popped out of my fingers. Sorry, GSU!
It has amazed me how long the current academic publishing regime has lasted. This dystopian fantasy by the publishers is the logical extension of a broken business model, where the publishers provide essentially zero value yet charge enormous fees. GA Tech should use this moment as a clean break point, and demand that all campus materials be either in the public domain or be available under Creative Commons license. Award tenure based only on publications which are under CC license.
Universities need to remember that they are the folks that generate *all* the content that publishers want to use against them. They can stop giving it away to these guys any time they like. In this era of global networking, there is essentially no added value in distribution, warehousing, and organizing papers into journals. Publishers need to be reminded of this fact.