Brad, again, nice in theory, but the reality of the music business is different (been there, done that, got a collection of crappy t-shirts that I gave to good will 10 years ago).
Bands start out local, group of friends, whatever. These days they put up a myspace page, maybe record a couple of songs in their basement, and try to get gigs are local clubs. Most of those gigs at local clubs pay "door" or "part of door" (especially on shared bills) and as a result, most of those musicians aren't making enough money to afford strings and gas to get to the gigs, let alone anything else.
If a band becomes popular in a local market, they may reach the level of actually getting paid to play. But even good bands aren't making enough at this level to live, when you pay a 5 piece band $1000 a night, they are still each only making about $100-$125 to play, and most of these bands play 1 or 2 nights a week max.
Record companies are what tends to take bands from this point to "suddently playing 1000 seaters on a grinding world tour". There isn't a whole bunch of space in the middle, except for a very few bands who have done things in other ways. This stuff happens because the record company fronts the money to record a decent quality CD, and get it out there, distributed to the radio stations and such so that the band gets exposure. Then the band can play these gigs and actually make money.
There are literally millions of garage bands, singer / songwriters, musicians, and digital music artists out there, but without someone to pull them out of the background noise and get larger groups of people to hear them, there is no way for them to grow.
You alluded to Rolling Stone before. You do understand of course that 99% of what is reviewed in Rolling Stone gets into their hands via the record labels. Without this, they too would be running a fishing net through noise, talking about bands nobody has ever heard before (or likely will hear again), and they would become a significantly less reliable source for music information.
It is a process. Without money coming in, most musicians are forced to take real jobs, and that music won't get made because they don't have the time or the money to make it themselves. That is what a lack of a viable business model does to things.
You end up with great opera singers selling cellular phones because he can't afford to make his own album and go on tour by himself.
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