People like to make the comparison of the inevitable democratization of books to how the internet changed the music industry, but that's just not an apt comparison.
Books cannot be consumed in the same way as music. Pop songs are usually 2-3 minutes long, and an entire album clocks in at half an hour to an hour. Generally you can listen to a few songs from a band and make a decision as to whether you like their style and want to buy the album on the spot. Books aren't like that. A reader must often invest a significant amount of time--days--before it becomes clear that a book is or isn't good. Publishers provide the extremely valuable service of validation. If you get your book published up by Random House, then the reader at the store can say, if absolutely nothing else, that a group of well-read professionals thought your book was good enough to warrant stamping with their brand and spending money polishing and marketing. You just can't say that about 99% of self-published material, and when it can take days for a reader to determine quality, that distinction becomes important.
And, despite what many would lead you to believe, publishers provide a valuable service besides validation. They take a raw manuscript and polish it up to professional standards. The manuscript is only part of the finished product that we call a book. You also need cover art, which is your book's first impression and incredibly important--not something you want to leave to your 18-year-old nephew with a cracked copy of Photoshop. You need typesetting, which is still important in the digital world: how many middle-aged writers know--or want to learn--HTML/CSS? You need editing. Having run a site for writers I can guarantee you that an author's perfect final manuscript is still filled with typos, mistakes, and ripe for polishing from a trained professional. You need marketing: the best book in the world won't get read if nobody knows it exists. The truth is that writers are good at writing, but often not that good at all of the other aspects of publishing a book. A big publisher takes that off their hands and handles it in a professional way.
I suspect that the people who say publishers are dead have themselves never picked up a random indie author's book from Amazon. If they had, they'd realize that not every author is Amanda Hocking or Scott Sigler. In fact they'd probably realize that what they just read was filled with typos, had shitty cover art, maybe had greater structural problems like weak characterization, and likely was priced just about right at 99 cents.
If anything, the death of publishers could be very dangerous, because when young new readers start getting burned by crappy self-published books, they'll get turned off to reading and we'll have lost yet another generation to TV and fast media.