Nice post, thanks y2koasis!
Some parts of the things mentioned are correct; but one thing is missing.
If a great artist does not sell much albums, then the record company's have less money to spend to encourage or contract new bands.
So, if there are no great bands anymore, music loses his face and little bands don't provide in the slipstream of the succes.
The CD/musicDVD prices should be lower then they are.
Material of a CD cost nothing, just a few cents.
The government earns a lot by taxes and the recordcompany's earn a lot.
The artist himself don't provide enough.
So the recordcompanies are to blame for the increasing sales and the illegal downloading and burning.
They created a market for people who are sick of paying too much for a product that could be much cheaper.
This is also the answer; keep the product payable for everybody.
MP3 could also be a stimulating force to buy an album; a friend sends you a mp3 of a band and you are caught.
It can be a reason you buy a single/album.