$7 to the writer for a fiction work is pretty good, IMO. There's probably no way you're going to achieve that otherwise. (I'm part of the "fuck the legacy publishers" camp; I do care about compensating writers and some editors, but in general, I'd rather pay less, read a lot more books, and have writers paid more, and fewer useless NYC publishing house employees playing games and acting as gatekeepers.)
Oh, now I remember hearing something about how high the margins in the publishing business are. Probably you're right: $7 to the writer should be more than a writer can count for, with any reasonable retail price, in the traditional publishing model.
