I self-published my first book for many reasons.
1) It's not in a usual format, it's a novel written like a script. Would it have mass appeal (especially with publishers)? Maybe not.
2) It's my first book. It's difficult to find a publisher for a first book and I wanted to see it in print. I wanted to be able to put it on my bookshelf.
3) I honestly didn't want to shop around for editors and then agents and then publishers. Not for a book I think would be rejected anyway. I wrote the book for me, it was a story dear to my heart and I had no choice but to write it.
Was I happy with my decision? Absolutely! 1,000,000%. Actually, after going through the whole process, designing my cover (which I loved doing and it looks great) and preparing it for printing, I decided I might consider the option for the rest of my books.
Besides, my book is sitting on amazon.com. The only place I, and a few million other people, buy their books.
Also consider this:
Fast-forward to the early 21st century: the publishing industry is in distress. Publishing houses--among them Simon & Schuster, Macmillan, HarperCollins, Doubleday and Houghton Mifflin Harcourt--are laying off staff left and right. Random House is in the midst of a drastic reorganization. Salaries are frozen across the industry. Whispers of bankruptcy are fluttering around Borders; Barnes & Noble just cut 100 jobs at its headquarters, a measure unprecedented in the company's history. Publishers Weekly (PW) predicts that 2009 will be "the worst year for publishing in decades."
I think publishing the old-fashion way will be gone soon. I think people will read on computers, cell phones, mp3s. Anything but paper.
But, large publishing houses do exist. And if money, fame and large contracts are your reasons for writing...go that way. But, the self-publishing route is here now without the stigma and I think it's here to stay.