For somebody on a tech forum you have a strange idea of advancement. Having worked in publishing myself, companies will only go under if they fail to move with the times and persist in suing more modern companies, rather than altering their own business processes.
Yes, some will go under. Manufacturers of stage coaches, papyrus, and videotapes have also gone under. Things advance.
Amazon, and companies like it, enables anyone who writes a book to publish it and bring it to market cheaply and independently. Publishers are rightly losing their places as the gatekeepers of information. Have a look at things like
The Domino Project for a fantastic outline of what has already been done with this sort of publishing technology.
I agree with you that there are significant DRM issues currently. I don't like the fact that my books are tied into Amazon's ecosystem. However, ironically this kind of DRM was insisted on by publishers to foil piracy. In doing so, they tied themselves into Amazon's system. These issues will come out in the wash. Look at the music industry - iTunes always restricted rights over downloads of its music. Companies like 7Digital have entered the market, drawing customers away from iTunes with DRM-free offerings. Apple subsequently removed the DRM on its music.
Kobo has entered the market, and is doing a decent job of making its name known. As publishers sort their own processes out and Amazon start to lose some traction, the restrictions we currently see on eBooks will fall away.