This is a kind of trite thing to say, but it's pretty damn true. The massive post-War project in the United States of mass post-secondary education coupled with the now dominance of the internet has put "literature" in transition. There are more people in the USA than ever doing "literature." At the same time, the means of production and distribution are wildly different than they were just some twelve years ago. The industry (whatever that is) is in flux. I know absolutely no one involved in this latest niche imbroglio, and only know of a couple of people secondarily or tertiarily related to it. It seems that a lot of the commenting has been about siding with one party over the other based on loyalties, friendships, aesthetic/political or "poetics" stances, et cetera. That is fine and good. Everyone should have a friend.
Two people removed from the situation each have a more systemic (I know ... another trite word) take on the matter. Mike Meginnis breaks it down in a kind of microeconomics style, while Joseph P. Wood breaks it down in a kind of sociological/political economy style. Both takes seem to me the most clear-headed and insightful. I think that both takes end up more or less "Don't hate the player, hate the game."
Even if you could care less about "indie-lit," the dynamics of the imbroglio and the subsequent discussion have analogous threads in any creative enterprise these days. The means of production and distribution of music and film have very certainly and very radically changed. Making and distributing is way easier and way cheaper. The "barrier to entry" is nearly ground-level. What was "indie vs. mainstream" twelve years ago isn't "indie vs. mainstream" today. Maybe, as Joseph Wood hints, it's a matter of whether to view the arts on a spectrum rather than oppositional. Maybe the spectrum has been the usual, but the Twentieth Century's means of production and distribution, e.g. mass media, set up binary oppositions - i.e. "mainstream" vs. "alternative/avant/ ..." Maybe this 20th Century type of means of production was an anomalous hiccup.
And so maybe that's why there's so much difficulty, anxiety, screw-ups, shadiness, and hurt feelings right now. We've all been raised and schooled under a mass-media model of culture - mass production (and its opposition) , mass distribution (and its opposition) - that just isn't operative anymore. Maybe it's a new game, and maybe the players are figuring it out as they go along.