Whether or not you like Borders or view it as some kind of parasite on the back of a beleaguered publishing industry, its slow-motion demise is a horrible thing for books.
1) If Borders goes bankrupt, it can’t pay publishers, which means that lots of publishers are going to have serious liquidity problems. Publishing being a business that even in the best of times tends to hover over the brink of insolvency, suddenly being told by one of your biggest buyers that you’re not going to get paid because they’re going bankrupt is more than bad news–it will be a deathblow to many.
2) As Moby Lives puts it, “676 fewer American bookstores.” Undoubtedly, many of those locations will be resurrected in some new form, but that will take time and publishers will suffer while the transition is underway.
3) Having only one major retail chain bookstore in the country is definitely a bad thing. Though our capitalist system has plenty of flaws, increasing competition between vendors is not one of them. To the extent that a damaged and dying Borders can’t compete with Barnes & Noble, the market suffers.