You're entirely correct.
The industry thrived previously because it was very hard to make films (etc.), but easy to watch them. Distribution was also difficult.
The technology to make and distribute films is now cheaply available, such that the average Joe can do it.
The industries are old hats that simply can't move fast enough, and they've got used to getting paid vast amounts for doing very little work.
The industries are now trying to stop creativity, in an attempt to keep their piles of cash. Stopping things like derivative works are the undoing of society itself.
Now, while I believe the law itself is horribly out of date (as is public perception), I still believe artists deserve to be paid. However, in this age of mass, easy distribution, I see no reason why there has to be many big wigs doing little more than lining their pockets.
The industry should be free to mould itself to something more reasonable, and I'm sure it will (but probably the hard way).