MSNBC has a nice little article about independent game development. It contains some interesting data and input from a wide range of independent developers and publishers, including Geoff Howland, who is a genuine nice guy.
I agree that indie game development, as far as I can tell, is like game development in the late 80s and early 90s. There has recently been some discussion on a mailing list about the three first games I worked on, from 1991 to 1996. They were made by very small teams, and that was a very satisfying experience. Not that working on big budget AAA titles does not have its own rewards, but still, I can definitely see the appeal.