I don't think that it's up to the government to decide how the music distributors and bands make money. If they wish to sell their music, then the government should strictly enforce the rules. Otherwise, the market will become unhealthy.

You can get an excellent view of what happens on unhealthy market by the current standing in the operating systems. Most people use Windows, highly due to pirates. If there would be no pirates, much more users would prefer to use Linux and it's business models instead.

BTW I download my music from eMusic, which sells music in the form of non-DRM mp3 files (unfortunately no Ogg Vorbis yet, but I suppose contacting them would lead to it being offered also) and the artists do get paid. If anybody is interested in that, drop me a message since with invitation both parties get to download an additional 50 songs for no cost. Plus if you plan on using it on Linux, then mention that also for a tip.