This is not cheap, and I'm very glad I didn't need to cover this back when I was publishing papers.
If anyone knows a good article on the detailed economics I'd love to see it.
We have a couple of EICs for major journals at our school, and I suspect (but do not know for certain) that the journal subsidizes their conference attendance too, so that the journal's senior editorial staff can meet in person at least annually.
My point is: don't constrain your cost focus to just distribution. There's more to running any organization than initially meets the eye.
Have a web site where scientists can submit papers. Other scientists can then review the papers. The reviews are publicly (though optionally anonymously) published along with the papers, and the authors of the paper can submit revised versions of the paper.
The website would get far too many terrible papers.
Many papers would get no reviews.
Many reviews would be terrible, and done by non-trustworthy people.
The problem with the system you are suggesting is that it feels a lot like wikipedia, and who "wins" on wikipedia has little to do quality, and a lot to do with who is willing to spend the most time editing / wiki-lawyering.
http://www.the-cryosphere-discuss.net/5/1749/2011/tcd-5-1749...