spiregrain says According to Brewster Kahle of the Internet Archive, printing and binding a 100 page book costs $1, which is less than the admin cost of lending and taking back a library book. See here for what this might mean for book sales and lending models for public domain books.
My reply: It would be awesome if small press books could be produced for $1 a copy. Based on what I've seen, though, a 100-page perfect-bound book (that is, a paperback with a spine) on decent paper done through a reputable POD print shop will run $2.40-$2.75 per copy, depending on things like setups and proof changes. This is assuming the book has a glossy color cover and a B&W interior. More pages equals a higher per-book cost, of course.
If the publisher were able to order books in large volume, he could get the desired perfect-bound books for a cheaper per-book price from an offset printer -- but the publisher would have to order a minimum of 5,000 copies to even begin to get the per-book price down below $2.50 a copy.
To get it down around $1, he'd have to order 20,000 or so. Aside from requiring an investment of $20,000 from the get-go, that's a heck of a lot of books to store and process. Most small presses are 1-to-5-person operations and they don't have warehouse space, nor the funds with which to rent any.
And then there's the issue of being able to sell all those books and recoup the printing investment. The average small press short story anthology sells 150-500 copies. A fiction collection or first novel from a literary writer published by a university or specialty press may comfortably sell 1000-3000 copies. An established, award-winning literary poet who gets his or her collection used as part of the curriculum of college poetry classes can probably sell 1000-1500 copies; most other poets sell far more modestly. So, 20,000-copy print runs just aren't sustainable for many book projects, and so $1 books just don't happen.
On the other hand, the publisher could produce 100-page B&W saddle-stapled 5.5"x8" chapbooks on his own for less than $1 a copy if he considers his own labor to be free. This will require ready access to layout software, a copy machine and the proper folding/stapling equipment or an actual booklet-making machine (some models run about $10,000 new). The publisher will also need lots of time and a fairly large room dedicated to his assembling and storing the books. Chapbooks are most cost-effective if the publisher works for a company that owns a big copy machine and he or she can negotiate with that employer to bring in his/her own paper and toner to do print runs.
While the resulting booklets may have a charmingly DIY look, they are not going to be aesthetically competitive with perfect-bound books with glossy color covers. And it's hard to generate even 500 copies of a book this way. I've known several small-press publishers who started out doing chapbooks and 'zines by hand; most all of them eventually got tired of the labor involved and switched to using commercial offset printers or POD when they could.