Is the growth of e-publishing good for the development of new literary talent, and why is that so?
Before self-publishing, in order for a book to be published the author had to send it to an agent or to an editor at a publishing house. These publishers are interested in what will make money, not what has literary merit.
Because most publishers were still also retailers, generally undercapitalized and competing for relatively small local markets, they were not inclined to take significant risks on authors. (eNotes)
As a result, I am sure that many very talented writers were unable to get their foot in the door. Self-publishing allows people who have good stories to tell to reach wider audiences, without going through the traditional gatekeepers.
A good example of this is the book Eragon, a fantasy novel self-published by its young author.
[Christopher Paolini] had it self-published by the family publishing company, Paolini International, and Paolini then traveled to various schools advertising his novel. In 2002, author Carl Hiaasen discovered the book while his stepson was reading it, and brought it to the attention of his publisher, Alfred A. Knopf. It was republished by Knopf in 2003. (Wikipedia)
Whether or not Eragon has literary merit, its young author was clearly very talented, and the book was very popular. Having more options can only be good when it comes to books! The modern publishing techniques can ensure that a book is available online, where people can read it for free or low cost. Good ones will then be chosen by the people, not agents.