(I wrote this response to your post in the Pit thread, and then realized it was more appropriate here so I just copied it before hitting submit.)
I agree with you about a high rake being terrible for poker in general, but for me this is why I find playing in live casinos/card rooms discouraging – if you’re playing limit, for example, the rake is usually a flat $4/hand plus a tip to the dealer, so $5-$6/hand. At any limit below $8-$16, this is a disaster. The house is sucking money out of the table so fast you need a steady influx of players to replace those who go broke.
And yeah, it’s crazy how much money online poker sites make for doing something incredibly simple. (Which is why I don’t believe any of the majors tamper with the odds/cards – why risk disrupting a river of money?) But as long as their brick and mortar counterparts are charging so much more, they have little incentive to charge less.
What I’m surprised by is that no one has started a site with a smaller rake. I’m guessing it’s because most casual players don’t realize how significant it is to their win rates so it’s not enough of a draw to suck a critical mass of people away from the major sites compared w. “I saw that one one the TEEVEE!” and “OMG deposit bonus!” The heaviest players would move over once you hit something like critical mass, but rakeback lets them pay a discounted rake, so you’d have to severely undercut the current rakes to attract them.