I've been reading Paperbacks from Hell

Great book, by the way.

The outcome of the case meant that publishers were forced to value their stocks at full cover price for tax purposes, and as a result new books had to hit blockbuster numbers over a period of 6 weeks in order to be financially viable. He goes on to discuss marketing teams, embossed covers and such which we associate with 80's horror fiction.

Hendrix was focusing on the cheap mass-market paperbacks, which had a very wide audience through not just independent book stores and chains like B. Daltons and Waldenbooks, but through spinner racks were available in many drug stores, grocery stores, and department stores (and still are, to a much more limited extent).

The decision also had much wider effects on the publishing industry, with ramifications for everyone in the distribution channel. The first thing that happened is that distributors could no longer hold onto large stocks of nominally out-of-print titles, which meant that the "long tail" of publishing (i.e. how long it took for a given title to sell through, sell out, or make back the initial cost of printing & storage) was drastically reduced - not just for mass-market paperbacks, but also for academic publishing, cookbooks, and many other genres - but the particular wording affected primarily works that were published in a single printing, and that mostly hit smaller publishing firms hardest.

So there was something of a depressing effect on niche titles. Leonard Schift in "The Thor Power Tool Decision (US Supreme Court) and Its Impact on Scholarly Publishing" (1985) wrote:

Publishers’ release of new titles has become much more conservative in recent years. Many announce titles well in advance of publication, and only make the decision to publish when sufficient orders have been received. The most significant change (which actually began before Thor, but accelerated with its decision) was the rather dramatic decrease in units produced of a new title. For example, some 15 years ago 2500 copies of a graduate research-level psychology monograph might be produced. Today, even with a much larger marketplace, only 1500 to 2000 copies of a similar level title will be produced. Fifteen years ago, when the successful title had sold some 75% of its print run, this would have prompted the publisher to reprint additional copies. [...]

Still another concern had been the steady rise of the average list price of scholarly books. The arguments that have surfaced in recent years made it attributable to the cost of materials, inflation, etc. A major factor which has not been discussed is the smaller print run which has dramatically affected the list price. There are certain fixed costs which are usually amortized over the entire length of the print run. When this print run is reduced by 20% to 30%, the list price must be increased to cover these costs. There are many other factors which surround cost increases, such as independently run warehouses and fulfillment centers, and the current general makeup of the ownership of scholarly publishers today.

Higher prices for lower print runs were nothing new in publishing, not even in horror publishing, but low-run, high-cost horror fiction was normally the province of small independent publishers like Arkham House and Gnome Press, which dealt primarily in hardcover. Arkham House also had to deal with a "long tail," with small print runs of 3,000 copies or so taking years to sell through, but in that case the books were literally "warehoused" in August Derleth's house, so the cost of warehousing was less of an issue.

Keep in mind, for an average publisher, storage and shipment both cost money; the cover price of a book has to factor in not just writing, editing, proofing, art, printing, and marketing, but also cost to store and ship. As a book gets older, the costs to store add up, while the potential sales go down; this is largely why you see books which don't sell remaindered and bargain binned - the costs to store them are more than their potential sales value.

And, this affects how books get into libraries.

Karen Schmidt in "Never Read Any Book That is Not a Year Old: Thor Power Tool, the Publishing Industry, and Library Collections " (1985) wrote:

In the case of the publishing industry, unsold titles placed in inventory traditionally have had their market value lowered, which brightens the profit reports. This profit derived from tax savings often was used to finance the publication of new titles which it might not have been otherwise economically feasible to publish. At the same time, the publisher was able to maintain a stock of works published in previous years. For those publishers involved with scholarly works and research texts-firms such as Plenum, Praeger, and Wiley-this was particularly advantageous, as such materials are sold almost entirely to the academic library market, and so are slower sellers than other sorts of titles. It is typical for a respected economics text, for example, to have an initial printing of 5,000 copies, with a projected sale life of five years or more. The sale price might remain static over this period, or might rise with inflation. Regardless, the publishing house could and did reduce the value of the inventoried copies to well below production cost, allowing the house to encourage and generate other scholarly works.

The result being, fewer publishers controlling more of the market, with less diversity in publishing, titles going out-of-print, and higher prices generally for niche and academic works. This was part of an ongoing publishing issue which is still visible today in the high cost of textbooks and journals.

Which isn't to say that publishing never recovered - Print-on-Demand and e-publishing have seriously changed the industry, and still are changing it - but it did cause a greater consolidation and contributed to higher prices, more aggressive marketing, and faster publishing schedules.