Sounds alright, right? That's got to be a lot of work!
Except when you consider what actually goes in to converting and publishing a book online.
Unless the agency has undergone some MAJOR personnel changes and hired cover designers and converters, the work of converting and designing the cover of the ebook will be done by outside freelancers.
AKA the agency has a list of a couple of people they know who convert books and/or design covers and they send your book to them, get it back a couple weeks later, then proceed as with client-type (2).
The agency has probably done extensive work on these projects, even the ones that are self-published, and even tried to sell it in many cases. They've certainly earned their 15%. But I'd be hard to convince that the agency is earning more than that 15%.
You should be hard to convince, too.
Ask a lot of questions before signing up for anything that involves more than a standard commission. Who's doing the work? Who's paying them? Get the facts, and you may feel that an increased commission is justified...or you might not.