Thoughts on self-publishing

Jeroen Steenbeeke  
A number of my co-workers have suggested I try self-publishing the second I told them I have written a book. They have a number of reasons for this:
  1. A lack of faith in the future of the traditional publishing industry
  2. A preference for e-books and reluctance / unrealistic pricing for books that also appear in print
  3. A perceived lack of English language mastery on my behalf, based on the very real lack of English language mastery of Dutch people in general
  4. The fact that most fantasy publishers and agents live in the United States, and might be hesitant to take a client from the Netherlands (assuming I get past the querying stage and they like my manuscript)
  5. The fact that you get a bigger cut of the sales price if you self-publish

Of these reasons, I immediately dismissed #3, and the only way to find out if #4 holds is to try. Reason #5 is attractive of course, but you have to realize that self-publishing also means doing your own marketing (though right now even my proofreading drafts are doing rather well by Word of Mouth alone). I'm not exactly sure what to think of #1, though I think it's too early to call the publishing industry dead. Reason #2 is an interesting one. I don't have an e-reader myself (unless you count my Android phone which has a Kindle app), but I do think it's preposterous that an e-book version of The Eye of the World costs $6,99, the same as the paperback.

So, will I self-publish? I guess it depends on how my querying goes. There aren't that many literary agents that accept Fantasy novels, so I only have a limited amount of people I can send queries to (once I'm satisfied with my draft of course, which may take a few more months). I really like Lydia Sharp's American Idol analogy in this regard. If my queries get rejected that means I suck at "auditions". If an agent request my manuscript ("I'm going to the live shows") but decides not to represent me then perhaps I just need to further revise the book ("you're not ready now, but try again next year"). Then, if they do represent me, they might not find a publisher ("Only one person wins the talent show").

Are any of these stages a reason to just give up on traditional publishing and go for self-publishing instead? The only one I can think of is the last one (not finding a publisher) or perhaps still getting rejected after rewriting three times and resubmitting it just as often. Any other thoughts about this?
Addendum (29 January 2011)
An article on Slashdot mentions an Amazon report that states they are selling more ebooks than paperbacks, as well as more ebooks than hardcovers. All print books combined still have the lead, but only just (55% versus 45%). Keeping this in mind, and with articles such as these making a good case for self-publishing, I'm really not so sure about the traditional publishing industry.