I make about 90% of my living from stock libraries and instruments, though the vast majority of that is from direct sales. I still do have some good relationships with 3rd party distributors that are worthwhile. People do definitely by sfx, different types for different markets. I think most people on here sell dry material geared toward sound designers to manipulate further on their own. My work is more thematic "pre-designed" sounds or music for visual artists to drop directly into a project. Fairly different market there. And I also do virtual instrument libraries, which are obviously just for musicians.
For straight-up sfx I think AudioJungle.net is a really good place to be. They have a large user market. While music sales there far outweigh sfx, it's still a good spot. They have very fair royalties and it's super easy (and free) to get on board. I know of a handful of people who make their living pretty much purely from music sales on there.
A new outfit called Sampleism launched recently. Looks like a really decent concept, but they charge a weird tiered subscription fee just to sell, plus they take substantial royalties on top of that. I've been in the stock audio/sample/patch market for a decade now. My work has been sold in a number of shops online, and in large retail chains like Guitar Center etc. I've never once paid a fee to have my products carried. Distributors take a chunk of the sales, that's the "fee". It would be kind of like Stop n' Shop charging the milk company a monthly fee to cover their electric bills. Sorry, doesn't work that way. And the upper tiers promise promotional priority, which smells kind of like payola to me. I dunno, maybe I'm just missing the point.
I've just started getting into doing stock libraries for iOS developers. This might turn out to be an interesting market. These devs need all kinds of little interface elements, button pushes, transitions, etc and in the beginning they may not have the cash for a custom design. I've had a few so far start with stock material and then get in touch with me later to replace them with custom sound and music once they have a handle on sales etc. I am exploring this now and it seems worthwhile. There are loads of people selling stock UI elements for iOS app developers, same concept.