As proprietor of a small independent art gallery, I can attest that it is very difficult for an artist to make a living completely from their art. Of about 40 or so artists we have contact with, only 3-4 make significant income enough that art is their primary job.
One of the best uses of public space as art gallery I have seen was at a small hospital in Hudson, Wisconsin, which used almost the entire hospital as a public (juried) art show-- especially the waiting areas were more like a museum/art gallery than a hospital.
There were two great effects from this: excellent exposure for artists because people spend a lot of time "waiting" at hospitals, so it was "something to do," with basically a captive audience AND it served to make the hospital feel almost "homey" as opposed to cold and institutional.
A small description and price was listed next to each painting/art piece, and if you wanted to make a purchase, you simply took a small card with the identification from a holder (like a business card) to the hospital gift/snack shop and purchased it there.
I think for this kind of setting to work, both the artist and the "host" has to be interested in making it work. It's not a place for pushy sales... it's more about passive exposure; and the artist(s) and host need to really work out how art ("soothing" and "restful") is of benefit to everyone, not just a sales opportunity for the artist.
Thanks for your great and insightful comment. It's good to have feedback from someone in the know!