I've made a few Blurb books and they can be nice. Magcloud is working on the same idea in that people buy it directly from the site, the difference is that propitiatory software is replaced with standard desktop publishing software.
My thoughts here have been about trying to overcome the problems with producing a 'proper' published magazine, there just isn't a big enough market. On-demand gets round this. Obviously the quality is lower than a well printed magazine (not to mention a quality photo book), but what's the other option: a computer screen?