Maybe in 1995; but the industry has not worked like that since Amazon set up shop. Publishing was the first mass media industry to get disrupted. Non-essential work gets pushed down to the author / creator in such scenarios.

Music is the same; there was a time when your record company would pay for studio time, mastering, publicity, etc. Today? If you’re a serious artist you’re just expected to have $10k in recording gear and the knowledge of Logic Pro to produce your own songs and run a Twitch/Twitter/insta/tiktok account to connect with your fans. You honestly don’t even need a record company anymore since you can book a tour off Spotify listener count alone (touring is where the money in music is these days).

So ebooks are much cheaper than printed books then, right. Obviously not. All the work the publishers aren't doing on them, and the material savings in not even publishing them to paper ... but ebooks cost more.

So what are publishers doing in return for the higher sales price of ebooks?

Honestly? Book reviews. A literary agent will know lots of other authors who might be willing to write a review of your book. Good if you’re just starting out, unnecessary if you’re established.

And ebooks generally are cheaper; there’s a ton of $0.99 genre fiction available on Amazon.

They might disagree about that though.

From the outside it looks like they operate more like VCs, publish lots of books, see what sticks.

In fairness, making things "stick" includes things like marketing, sales, and distribution. Most publishers these days do the latter two but not so much the marketing and promotion part. For example, they're not setting up book tours or sending out review copies for the most part these days.