Plus with the cable model, ESPN gets subscriber fees from people with no intention of ever watching ESPN. A bunch of people do watch ESPN, but it's a nice subsidy to have millions of people that don't use your product pay for it every month. Having to rely on people to take a look at what your product costs and then make a real decision about whether or not the content justifies that expense is a different ballgame. And I assume, ESPN's already very expensive price tag ($7-8/mo) will only go up as they keep losing non-viewer subscriber subsidies.
As someone else mentioned, it does seem to make more sense for the content producers, the leagues themselves, to handle the distribution of this all. As bad as it's about to get for ESPN, the regional sports networks are going to get it even worse. Baseball is my favorite sport, but there's no way the regional TV deals can be justified by the viewership (instead, even moreso than ESPN, they are getting paid from subscribers that don't watch). I assume at some point, those deals will either get a lot smaller or MLB will just take over it all. MLB.tv (and NBA League Pass) is an outstanding value. If they doubled the price tomorrow, I wouldn't blink. If they tripled it, I'd blink, but probably still buy (I'm saving a hell of a lot of money not buying traditional cable).