Not so. There are times when you can and should legitimately choose to go with a vanity/subsidy press or a POD (print-on-demand) company.
But first, let's define these terms. Most publishers lump vanity and subsidy presses together as one—a huge insult to the true subsidy presses. I admit that I pretty much put them in the same category and I apologize to all the legits out there. There is a distinction between them, albeit small.
One of the links I gave you yesterday provided a good definition of the two types of companies. Just in case you didn't click on it, here is an excerpt:
A vanity publisher prints and binds a book at the author's sole expense. Costs include the publisher's profit and overhead, so vanity publishing is usually a good deal more expensive than self-publishing. The completed books are the property of the author, and the author retains all proceeds from sales. Vanity publishers may exclude objectionable content such as pornography, but otherwise do not screen for quality--they publish anyone who can pay. For an extra fee, some may offer editing, marketing, warehousing, distribution, and/or promotional services (often of dubious quality), or they may provide variously-priced service packages that include differing menus of extras.There are also POD (print-on-demand) companies, which pretty much print the files as you deliver them, but they don't claim to be any type of publisher. They are on-demand printers, some of which will also provide light editing and order fulfillment services for a fee.
A subsidy publisher also takes payment from the author to print and bind a book, but contributes a portion of the cost and/or adjunct services such as editing, distribution, warehousing, and marketing. Theoretically, subsidy publishers are at least somewhat selective. The completed books are the property of the publisher, and remain in the publisher's possession until sold. Income to the writer comes in the form of a royalty.
(Taken from SFWA, Vanity and Subsidy Publishers, Definitions. Kudos to them for providing great info on the subject. These are the same people that bring us Preditors and Editors. If you haven't already done so, you really should go spend some time surfing their site. )
So, when would you want to use one of these companies? When you're publishing for a limited audience. This might include family or personal histories, a book of poetry, a collection of short stories, a book with regional interest, or a book aimed at a very specific, niche industry or reader.
In these cases, what you're looking for is a company that is upfront about what they are and that doesn't claim to be a real publisher. You want a company with a good reputation and reasonable prices for their services. If you want to make your book available for sale online, you can either do it yourself or find a company that also offers these services as part of a package.
I've seen decent products come out of BookSurge, Create Space, Lightning Source—and even Author House and Publish America. There's nothing wrong with using these companies, as long as you understand what they are and why you are using them.
And as long as you don't brag about them as if they're a traditional national publisher.