The problem is taking the DIY approach to a dangerous extreme in which you end up with a dillution of the talent pool because, simply, there's too many labels to keep track of. It works for established talent that can use their name to market themselves, but for Joe Startup it isn't as simple.
About six years ago (When Vivendi started making noises around consolidation and EMI was already on the acquisition path) I told a friend of mine that all this consolidation was gonna lead to a decrease in the number of releases available to the public, this friend (who used to be a VP in Virgin Latin America) said that it was impossible, that the mergers will lead to better releases and more artists because the merged companies would have a more secure financial position to develop and promote artists... you know today who was right and who ended up being wrong
The mentality of the major label isn't gonna change, it's gonna be slimmed down and made more efficient for consumption, the ball has been on the minor/indie labels' court for quite a while, and it's not about picking up the extra weight that the majors are shedding, is about changing the way the industry rules are set... just look at Mute, it became big enough to almost be a major and ended up being swallowed by one.
I hate to sound like a beancounter but in the end you have to find a balance between profitability and artistic vision/integrity, not just run brandishing spears trying to overtake that huge goliath of a major.
BTW Bob, funny you mention Relapse, that's a label I've been very fond of since the early 90's not just because of their output but also because of the way it is run and the people that run it... compare that to Roadrunner... *shudder*