Most short stories that went out were either in collections that were released as books, or in 'zines that were full of short stories. Many of these magazines' websites, when visited, would have down-on-their-luck messages such as that they are no longer paying for stories, because they just can't afford them anymore. Worse were the URLs that simply said there was nothing there. The money wasn't rolling in.
Think about it on the consumer end of things. Unless you're a writing professor, you probably don't know a lot of people that subscribe to these short fiction 'zines. The people running them are doing it out of love, and often out of their own pocket. Until recently, there were more short story writers than short story readers, and that's not a good ratio.
Things seem to be changing now, though, because of three things:
1. The e-reader
2. The e-reader's ability to instantly buy books
3. Quick and free digital self-publishing
With these things in play, writing now has a YouTube-level pass. User-generated content, voted for by other users, has been changing the face of media, and it's about time that the world of writing caught up. Like with YouTube, the world's aspiring writers can flood the market with garbage, and those that know how to please the masses will float to the top. Not to mention, if you're putting out short stories, a $0.99 shorty is an impulse purchase for many Kindle users.
You, as a writer, can do this now, today, and you don't have to ask anyone's permission.
Just like YouTube did not kill television, Kindle Direct Publishing and the such will not kill Simon and Schuster or Doubleday. It is valid media, though, and some of it is really good, believe it or not.
Anyway, that was a lot of lip flapping just to let everyone know that I am, myself, publishing short story series' on Kindle Direct, Pubit and SmashWords.
Are you excited? I am.