I have no idea. But I like that trash is currently king. It's gratifying to know that pap gets published, and should give any writer hope that they too can get their work published by major publishing houses
When you look at situations where book becomes very popular. It very often has to do with advertisement, connections, and marketing. Books like Twilight, Ergaon, or even Harry Potter became popular by means of putting the product out through right people, the right audience and even... At the right time. You cant bomb people's taste in books out of the water with your novel, but you sure as hell can give people a taste of your literary work. Persistence count!
maybe you should re-evaluate your writing goals. if the popularity of these types of books is making you fear your place on the shelves, is your heart still in it to keep going? don't you think that the right people will find you if you make yourself known or are you just going to give up simply because trash literature is king (for the moment)?
I don't know if I could help you as much, but all I can say is; write your novel, get it done (With all of the editing and such), and get it published. I know it sounded terribly easy, but it wasn't even the slightest bit. I'm struggling my butt to finish my on-hiatus novel, "Nezayu's Life", and I can definitely tell how hard it is to even write a part of a novel, let alone self-edit. Also, when publishing your book, it's good to start off small; don't go straight to Harper Collins or Penguins Classics since they're the big ones out there. Try to go for some publishers that didn't get much publish request. That way, when your novel became popular, you might be able to release your next novel, and might lead to a bidding war between publishers. Although to be honest, this was a way to get published for COMIC ARTISTS. But...Who knows? The principle might be applied to novels in a way, as well...
It's not really a fear of failure, is it? I know I'm a good writer, that what I produce is decent stuff. I don't think that's it. I like such an antiquated style that very few people these days like. So my stories are mostly for me, and they're in my head so I am entertained by them. Writing is a two-sided act; it is communication. If I have no one to communicate with, why bother writing it down? Or rather, if writing really is all only about me, what is the purpose of writing anything down? It doesn't matter if no one will read it, so why should it matter if it actually exists on paper for someone to read? I am already entertained by simply imagining the story, and so why not put the time to better use volunteering in the community or fundraising for museums, etc. (which is what I have been busying myself doing with all the time that I am not writing).
You should continue writing exactly because there is so much bad stuff out there already. When you stop, you lower the average quality of existing literature. Then, there might be someone out there who is looking for exactly the kind of story you are writing. Someone who is frustrated because no one writes this kind of story anymore. (Something similar happened to me lately. What I was looking for doesn't exist, it seems.) It saddens me that you don't write anymore, because I know that you are a good writer and that writing means a lot to you.
MOH makes a good point. I also can't stand the crap that's on the shelves today (too much sex and spiritism, not enought SciFi or Mysteries). That's why I'm practicing to make myself a better writer. Even if I never publish anything, I will find a way to show people my concepts, and perhaps someone will be inspired enough to write something similar, and inspire others. If it becomes a large enough movement, publisher's will take notice, and we'll end up changing the products of the publishing industry.
I like how you are thinking. When more and more people work hard to improve and show their concepts, sooner or later the publishers will notice that there is a niche they overlooked ... and then they will react.