I see it as a supply issue. Say we had the ability to grow cars in our backyard. What would happen to the automotive industry? It would disappear overnight, at best shrink to a niche market for people that want customization. Similarly, the only people producing media that will survive this, financially, are people that can supply something you can't copy easily, but which people are willing to buy. Merchandise, for instance, or compelling live performances. It's unfortunate, but it's a natural consequence of technology that will never go away - it's too useful, and too flexible, and there's no way to regulate it without destroying its most useful properties or spending ridiculous amounts of resources far in excess of its financial output. Artists that believe the box can be closed are being willfully oblivious to modern reality. Even people that aren't willing to pirate things are less likely to buy things in this sort of environment. Devaluation - it doesn't feel as good buying something if you know everyone else is getting it for much less.
The better, more realistic solution is to go back to actually doing this stuff for the sake of art, and yes, busking so to speak. Yes, there will be less incredible special effects and CGI in film and games, and fewer books, and even fewer musicians. The stuff we will have, however, will come from truly talented and imaginative people who can't resist spending time in their work, people that will inspire more to follow them. It's a cultural crisis, but not necessarily a negative one if you can reconcile doing something that (*gasp*) isn't profitable.