Tim O'Reilly's essay is the most common sense and economically sound analysis of the current intellectual property dilemma that I've seen. It only leaves out one thing... The social contract that the framers of the constitution had in mind when they empowered congress to grant copyrights. That social contract was intended to grant the creator of an original work an exclusive right to profit from their creation for a limited time in exchange for turning it over to the public domain at the end of that space of time. As examples you can now buy cars, televisions, and computers from anyone that is willing sell them. This competition has brought prices down to where ordinary people can afford them. Imagine if the only car you could legally buy was a $150,000 Mercedes...
Anyone can sell make and sell cars, airplane, and televisions because the patents have expired. Most patents expire in less than 20 years. Copyrights were intended to expire after a limited time as well - however corrupt and just plain ignorant politicians have extended copyrights (and in so doing stolen your rights from you) to lifetime plus 70 years for individuals and 95 years for corporation. Copyrights should expire in no more than 25 years!
It must also be noted that if you see an invention that you like but cannot afford, that you have every right to make a copy for your own non-commercial use. You can't resell it or make money from it without paying royalties but it's just fine for your own use. Music used to be the same...
Personally I like buying and owning CD's, and if CD prices reflected real world competition, costing say $8 - I'd go from my present one or two a year to one or two a month. No body likes feeling ripped off and the price fixed price of $18 is a rip-off. File sharing exposes one to music that they were previously unaware of and has prompted me to buy CDs from artists that I would have never has given a chance untried at $18.
Thank you Mr. O'Reilly!!!