I've noticed a lot of people missing the point when they talk about the Internet as a tool for sharing music, how it will be a brave new world where music can easily be distributed to listeners without cumbersome obstacles like music stores and record labels. But an important point is being missed here. It's not a question of technology. It's not a question of fairness. It has to do with the unwillingness of Those In Charge to give up control. Control means profit. That is why they are unwilling to embrace the Internet as a distribution mechanism. It's not because the record companies would make no profit, just that they would make less profit. Right now they're sitting pretty; they've spent the last century (in the US) slowly accumulating legal and means for getting more money (ASCAP, BMI, taxes on cd burners, etc.) and they're not going to let that go.
A perhaps melodramatic analogy. In the 80s, there was famine in Ethiopia. The starvation wasn't caused by an absence of food in the world; on the contrary, the US government pays farmers to not grow food. The problem was that the Powers That Were in Ethiopia perceived that they could gain more by denying these grain shipments to their citizens. It was never about enough food; it was about surmounting the self-interest who have something to gain by denying others. Similarly, it's not about whether the Internet is better or worse as a distribution mechanism. The record companies have something to gain by maintaining the status quo, which is why they will never embrace change.