Jane Austen Rejected and What It Says About the Industry

This is a bit old, but it really caught my attention. Apparently this guy (David Lassman) decided to see if some of the big publishers would recognize Jane Austen's writing if it was submitted to them, and if they'd accept it. What surprises me isn't that Austen was rejected--I sort of expected that considering her style is a big antiquated--but that most of the publishers didn't even recognize the writing, including one publisher who has been printing Austen's works in new editions and the like. I was also surprised that this guy wasn't brought up on charges of plagiarism, but that's not really what matters.
It's scary in a lot of ways. These are publishers bringing us new authors, supposedly representing the great literature of today, yet they didn't notice Jane Austen or even have a little suspicion about it? Perhaps most of them didn't read it, and, in fact, one of the publishers admitted that they probably hadn't read it before rejecting it out of hand. But for those that did read it, how could they say the writing was good and reject it and not be aware that it isn't original writing?
And what does this say about the industry? It likely suggests that publishers are so swamped with garbage that they've gotten to a point where they can't give manuscripts the attention they deserve anymore, especially good ones. It confirms my suspicions that one might actually need an agent in this business to get anywhere with some of these publishing houses, because if they aren't reading manuscripts that might be the only way to get out of the slush. But some of these publishers have rules regarding unsolicited submissions, so are they overloaded with solicited submissions then? Or have they become bored with the writing of today and perhaps take two seconds to look at the cover letter before simply rejecting something?
What do you think about this?

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