One of the most important words in your post is value.
How do we assign
value to digital media? Why is one specific combination of ones and
zeroes more valuable than another? Clearly there is value in the work
that went into creating the content. There is also value in the
enjoyment that consumers receive from experiencing the content.
However, now that the cost of reproducing information is nearly zero,
the “value” of a copy is also nearly zero. The notion of copyright only
works effectively when the cost
of copying is just high enough to create scarcity, but not so high as
to make a controlled-quantity production unprofitable — a very
delicate balance that we have
maintained for only a few centuries,
until technology caught up with itself. It was technology (the printing
press) that first paved the way for copyright to be a useful tool. It
was a house of cards from the beginning, though, and the ultimate
collapse is inevitable.

The connection between the value of the creative work and copies of the
work is artificial at best. Music
wants to be free, and more generally, information
wants to be free. An author/artist “gives life” to a work, and it
takes on a life of its own, complete with a kind of “free will”.

Some sort of alternative
compensation system is needed. I’m not sure that I’m ready to let
the government decide how much we pay for music and how much goes to
each artist, but it’s becoming pretty clear that the current system is
falling apart. Before there was copyright, there was patronage,
a system that served the arts very well. Technology fueled both the
rise and fall of copyright; if properly applied, technology could make
possible a revival of patronage, even more successful than its
historical forms. It wouldn’t be perfect, but it would be a start.