A friend of mine remarked, "Borders' sales model was a dinosaur, it is now extinct. Evolve or die." I worked there a couple of years and saw this firsthand; my friend sums up pretty well what killed them in a nutshell. I don't know if they simply didn't have the funds to evolve or had the funds and put them into the wrong initiatives. I have no idea why they tried to compete with Kindle and Nook. The maddening thing there is that Amazon used to be supplier of Borders e-store before they got their own. Clearly there was a mutual relationship there. Why didn't they work something out to carry and promote the Kindle?
The book-lover in me laments the demise of the Borders. Where I live in central Maine, Borders was right here in town. The next closest chain bookstore is a B&N over an hour away; I doubt I will ever visit it because I don't buy books in-store that much anymore. But I still loved to go into a bookstore and just absorb the atmosphere (see the film Inkheart for a better understanding of what I mean).
But the publisher in me won't be that sad to see the chain go away. See, another thing I learned first-hand as an employee is that chain bookstores are little more than a glorified ad agency for the biggest of the publishers. Did you ever wonder why you could walk into any store of a particular chain and see certain books and displays are nearly identical as another within that chain? Publishers buy that space, like exhibitors at a convention or advertisers in a Super Bowl. And it's priced so that the the chance of a small press getting a shot at that coveted space is a near impossibility.
This is not how the book marketplace is supposed to work. Content... Story is what people buy a book for, not the imprint. Big Publishers are hardly consistent in churning out continuous qulaity material with every release. An author might, but there is ample room for established authors and new finds at a bookstore front if a chain bookstore wanted. Simply use a 'established author/local author' model and I think you'd find that to be accepted as a fair set-up by most parties. Obviouslly the big corps would object, but then competition is what they're afraid of.
Competition: that's how the free market is supposed to work and that's all I am advocating.
And by the way, if you think ebooks are what killed Borders then you need to plug yourself right now into Kristine Katherine Rusch's vital series on publishing. You can start here (where she wrote about Borders impending demise back in January) and then go here for an overview of the role of Bookstores in the book market--in both places (and in several others in that series) she talks about how ebooks fit into the landscape of publishing; after you're done with those two articles, be sure to finish up with her post here about how ebooks will likely help sell more in-print books, not less...