Have seen a few people bootstrap themselves with POD and then move into traditional publishing.
Demanding people keep a massive stock of something just in case you want one is the height of privilege.
Most books available on PoD wouldn't be available at all without it. Not just less well known reissues but also new interesting books with limited readership, and books which larger publishers would ignore because of their own prejudices.
There are more luxury editions of classics than ever so quality-sensitive book collectors are still being catered for. And it's easier than ever to find secondhand copies of old books.
My self-published books via whatever it was called before being subsumed under the Kindle brand seemed decent enough quality, but I have received others from Amazon that were pretty bad (photocopy bad, for example).