Hey,
I understand your position, however, you have gone straight into a classic "The Chicken Or The Egg"-discussion. You will never get me to agree that because of the drop in quality music, downloading is up. Never. I will agree with you that the record industry made a lot of useless albums in the late 90's and that they totally dropped the ball when it came to the introduction of New Media and internet-based distribution.
Let me just say as a child of the 80's, that the theory of young people being poorer than in the 80's and 90's is nothing short of rubbish! This generation of young people, right now, is the richest there has ever been. Available income to the 14-25 year olds is off the charts compared to 15-20 years ago. ... And the business world knows this, so they are trying to take your money anyway they can and as a consequence, it seems neccessary for every teenager to have a mobile, laptop, LCD-TV, fat stereo, cars and spending on clothes in this agegroup has skyrocketed! - Now, I', not saying that kids are spoiled - many hold down jobs to get there, but there is an imbalance in the spending habits of this generation. It seems ironic that you would spend thousands on iPods and then fill it with free music. Buy the expensive car - steal the petrol.
Please understand me correctly, I am all FOR the free distribution of music, but I need someone to come up with a model that does not rely on charity, sponsorship, endorsements, handouts or crime. If you can do that, I think you can make a lot of money on your idea... And wouldn't that be fair ?