I think it's important to consider what digitalization means not only for distribution but also for the production process. You are ably arguing albums vs. singles. However, both concepts rely on music as a static product.
Maybe exclusively centering around albums and singles is a thing of the past, when music and other digital content was tethered to a physical medium such as a CD or tape.
An interesting experiment is the e-label by Warner Music "in which artists will release music in clusters of three songs every few months rather than a CD every few years" (Cf. http://news.com.com/2102-1027_3-5841355.html?tag=st.util.print).
Don't you think that this could fundamentally change the algebra? I think artists' increased and constant activity could prompt consumers to buy more songs. And artists are probably challenged do deliver higher-quality content - after all, they can't hide "weak" songs on albums and get that revenue anyway.
Music can also be an on-top service. For example, game developer Electronic Arts has established an own label which is to release popular game music. Again, in this case there are neither albums nor singles.