I am not pro or anti traditional publishing. Whether you go with a traditional publisher or not should be based on what benefits you, as the author, and getting your book to a wider audience.
To me, the benefits traditional publishers traditionally offered were these:
1. Advance - Getting money upfront is a huge boon. If you get $10k or $25k advance, that's money in-hand that you can use to pay bills while you finish the book. Or, if the book is already finished, money you can use to pay bills today rather than months down the line.
2. Marketing - Selling books is the publisher's job. They want a return on their investment. They need you to see your books. Maybe you have to go do book signings and stuff, but you don't need to worry about how anyone is going to find your books.
3. Editing - They pay the editor. You don't have to find an editor and then send them money and deal with all that.
4. Cover Art - They take care of that too.
5. Legal Stuff - They have lawyers. Is that reference to McDonald's in your novel okay or is it going to pose a problem? As the publisher, a lot of the liability will be on them, so they'll check things out and make sure. Plus they probably have insurance to cover themselves too.
Maybe there are more but that's all I can think of right now.
But, those advantages are fewer these days.
1. Advance - If you get an advance, it probably won't be very big. Even a $10k advance seems uncommon these days unless you're a celebrity with a million Twitter followers. So, the small advance combined with smaller royalties largely takes away this advantage for traditional publishers.
2. Marketing - These days, that's basically all on the authors anyway. And if you're going to be doing most of the marketing, you ought to be compensated for it in terms of higher royalties but you probably won't be. That takes away this advantage for traditional publishers.
3. Editing - Still an advantage of traditional publishers.
4. Cover Art - This one is a wash these days. You won't have to pay for a cover with a traditional publisher, but you may not get a good one either.
5. Legal Stuff - Your insurance agent is probably going to stare blankly at you if you ask about publishing liability insurance. Either that or you'll pay through the nose. So this one is probably still an advantage for traditional publishers.
Aside from that, the rights grabs are probably the biggest issue. I think about something like, okay, how did George Lucas get rich? Granted, Star Wars was a good movie and made tons of money, but rather than negotiate for more money for directing Star Wars, he instead kept licensing and merchandising rights. Back then, that wasn't as big a deal. Movie studios made money on movies, so tie-in stuff often served to promote the movie rather than be moneymakers on their own. But Star Wars merchandise was everywhere. George Lucas certainly wasn't stupid. How many millions of dollars did they make off that stuff?
So, yeah, now companies want those rights for themselves. They want every dime they can get.
My characters will probably never be anywhere near the popularity of Luke Skywalker or Darth Vader or any of the others but if they ever do catch on, I kind of think that money should be mine. I created my characters and I should reap any rewards for them.
I think rights are an important issue. It's one thing for a company to want the rights for characters created under a work for hire agreement. That's okay because you know upfront you are creating those characters for someone else. It's another thing for a company to want the rights to characters I created on my own and in exchange for a paltry (or non-existent) advance and almost negligible royalties.
For an agreement to work, both parties need to bring something to the table. I'm bringing (what I hope is) a quality work. What is the traditional publisher, the other party, bringing? If (and I do mean if) I can earn, for example, $10k profit on a book on my own, what can they do to help me reach $20k in profit or $50k in profit?
And if all I would end up doing is more work for less money and fewer rights, why would I want to do that?