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E-Reserves Under Fire From Publishers
RackinFrackin writes "Publishers Weekly has a story about a copyright lawsuit lodged against several faculty members and a librarian at Georgia State University. The case, Cambridge University Press, et al. v. Patton et al., involves e-reserves, a practice of making electronic copies of articles available to students. From the article: 'Rather than make multiple physical copies, faculty now scan or download chapters or articles, create a single copy, and place that copy on a server where students can access it (and in some cases print, download, or share). Since the practice relies on fair use (creating a single digital copy, usually from a resource already paid for, for educational purposes), permission generally isn't sought, and thus permission fees aren't paid, making the price right for students strapped by the high cost of tuition and textbooks, as well as for libraries with budgets stretched thinner every year.'"
You are, however, ignoring one problem on the other end. Copyright infringement is so cheap that it's not easy for publishers to compete, even if they were to price it "fairly". The iTunes Music Store is a successful example, but it was selling most of its songs at US$0.99 or so, which is cheap enough to make piracy seem like too much trouble. A textbook, even when reasonably priced, is not likely ever to be priced at a trivial sum.
I think the bigger problem is that each textbook in question is a little monopoly in the class you have to attend, which allows the publisher of that textbook to charge high prices. If courses were required to designate at least two or three textbooks from different publishers as "official", then we might see some price competition. Or, if professors were banned from unnecessarily requiring the newest edition, competition from earlier editions would serve a similar role in the market.
Outside of some areas of government work and a handful of tightly-regulated industries, "clear conflicts of interest" aren't illegal, and are, in fact, fairly common. Certain conflicts of interest may, while not illegal in and of themselves, be prohibted by particular contracts (particularly employment contracts), but most aren't even there (for instance, its a pretty clear conflict of interest to work for one company and to own stock in a competitor -- if its voting stock, there is a double conflict of interest -- but except in the case of an executive-level employee, this would rarely be prohibited.)