Seth Godin's take on zero profit condition makes a lot of sense.
I never really thought about it, but after reading the article, the one thing that really stood out:
No barriers to entry mean no big profits.
I always had the opposite view point. To me, no barriers to entry meant that it would be easy for me to jump on to the profit making wagon and get a piece of the pie I never had in the first place.
So I guess it's all a matter of perspective. If you're already on the wagon, me jumping on may mean less for you.
It's similar to no limit Texas Hold'em. If you make it easy or cheap for me to see the flop, I will play the hand and I may beat you. But if the cost to see the flop is too high, there's a good chance that I'll go away and you will win the pot.
So Seth is right when he says:
The only way to win is to break the rules. To play by your own rules, creating a market in which the cost of entry is very high, or even impossible. If you're the only one, then you win, by default.