To answer the original question, I have made a profit. I sat down and calculated all of the money I've put into my first book, and all of the money I spent on advertising on blogs, cover art, etc, etc, etc.. I've profited a grand total of...
Yep. That's it.
That being said, I've also only sold a couple-hundred books. Some on kindle. Some by hand. Some on eBay. You get the idea. But I think that if I keep at it, write QUALITY fiction (not just quantity), aim at the right audience, and keep plugging away, I think I can make enough such that it will pay for itself and then some.
Also keep in mind that Indie publishing (especially with the advent of Kindle/Nook/etc) is MUCH different that indie publishing was ten years ago. This isn't vanity publishing. It's true grass-roots publishing at the ground level. You just have to do all of the marketing and publicity yourself... which (if I have talked to the right people in traditional publishing) you'd have to do most of anyway.
So, if you're on the fence about it and think that you have quality work, I say, put $500 into it. Get some great cover art, editing and make it shine both in cover and in content. Then let it out to the masses and see what happens.
The worst case: No one knows your name, nothing sells and you wasted $500. This is good news, and this is the worst that can happen. Why is it good news? Because if no one knows your name (because, let's face it, nothing sold!) then your name is still clear to publish other works later, if you ever come up with a different story. You can keep trying stories until you actually find success, and each new story finds new readers. So if one does blow up, suddenly you have all of these other great stories out there that people will suddenly be interested in.
The best case: You blow up our of the gate, selling hundreds of thousands in the first year, like Victorine Lieske. She has an awesome story and is truly a kind, amazing person. She just published her second novel, and is on the road to blowing up again. I can't say enough good things about her or her writing.
Reality for you is sure to be somewhere in the middle of those two extremes, and I like my chances with either one. I think that it's a good gamble at this stage of the game.