The NYT has a little piece about Blurb, which formats blogs into books. But it's way too expensive for a blogger to use commercially to produce a book to sell to readers. It's really offered as a way to make an archive of your blog as a keepsake or a gift. A 300-page book costs $80, with only a small discount if you order multiples, and the shipping costs are also high.
Do readers really want to go back and read the old material on a blog? If they do, the archives are right there. I suppose it would be an interesting exercise to go back and find the posts that seem more enduring. To gather those posts together, out of the their original context, would make a completely different impression. Who knows if it would be good or not? Much of the fun of blogging lies in its transience. Like life itself.