The problem with Le Guin's position is that it's so Manichean, a world composed of good guys and bad guys with no ambiguities. To her, it's either sell books like deodorant or some ideal system where it's quality, not marketability, that makes books sell. This sounds good, but it's tripe. As you say, the Internet in general and Amazon in particular have opened up publishing -- Amazon getting huge credit because it not only allows freer publishing, but has set up a system that allows many thousands of new authors to actually connect with readers. Yet, Amazon is also a business focused on selling products at high volume with tight margins. These two goals aren't opposed, they're different aspects of a complex business. Amazon can be both a great contributor and profit-motivated, it's not that hard to see how.
Who defines quality, anyway? The tastemakers, like newspaper reviewers, who nobody much pays attention to anymore? Or Le Guin -- she seems to think she knows what's good. I imagine, what if John Kennedy O'Toole had the opportunity to self-publish A Confederacy of Dunces, instead of facing despair when all the traditional publishers turned him down. What if he'd been able to sell his work like toothpaste on Amazon, even if the tastemakers thought it wasn't worth publishing. To Le Guin, this would somehow violate the ideals the publishing world ought to aspire to. To me, I wish the opportunities offered by Amazon had been around back then.