Snappy: As a side note, the clothing industry does not have any intellectual property protections aside from brand trademarks. So...actually, you can copy a pair of designer jeans and make your own. This is why knock-off brands are perfectly legal, and why clothing products have the shelf-life of skim milk.
Software is a different critter, because it is licensed rather than sold. We make duplicates of our software installation media at the office all the time; one copy up to a shared network drive to make installation easier, and another copy goes into an off-site vault for disaster recovery purposes. But we are also extremely careful to ensure that the number of seats installed complies with the licenses we have purchased. This doesn't quite apply to DVDs, CDs and books as you don't typically "install" them (badly-done Sony CDs excepted).
To call digital data sharing communism is not quite an accurate term, as it refers to an economic model of state ownership. However the point is taken, that most economic systems are dependant on the definition and protection of property rights, and capitalism probably the most so. But here's the rub: to some degree, capitalism is all about managing scarcity of resources, and what MatYadabyte keeps coming back to is that in the digital domain this scarcity does not exist, or at least is substantially reduced.
In some ways, Snappy, you are asking the same question that Bill Gates did in his infamous "Open Letter", which is if people keep trading software free, what will be the incentive for programmers to write it? The open source community provides some answers to that, but the question can be applied on a broader term. Sure, musicians could get paid for live performances, but what's the incentive for a movie studio to bankrole the next Lord of the Rings movie if their cost is $300 million and their gross receipts are $0?
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When you buy something you by many aspects of that thing. The thing in itself. The use of the thing. The brand, the support, the lifestyle niche, the authenticity, the quality or the lack of quality.
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I'm not being snarky about this, but my curmudgeon brain has to pipe up. You get the artifact. Nothing else. Just because I own an iMac doesn't make me an artist, even if I get a pony tail, drive a Mini Cooper, and wear little round glasses. The lifestyle piece is a purely artificial conciet created by marketing types to make you feel good about spending money on their product that is in many ways just like all the cheaper alternatives.
(In case that sounds too negative, I will point out that I am typing this on my Apple Wireless keyboard, using my Apple Wireless mouse, on my 17" iMac, with an iPod with Video sitting next to me on the desk, wondering when Apple will sell me a PDA!)
The reason most bands don't have a problem with digital piracy is because it really doesn't effect them. It is bad for record labels, but not for them because they don't make much money from album royalties anyway. The ASCAP/BMI payments they get is likewise a pittance.
StuBear: Region codes are widely misunderstood; they exist to preserve a distribution model that had been in place for a very long time. Most studio had legal agreements with third parties in smaller markets to re-distribute their titles to those markets. The incentive to do so goes away if people in those markets just import the R1 discs on release date.
There are perfectly legal ways around region coding. I could buy a DVD player from the UK and use a voltage transformer. Then I could pipe the signal into an outboard standards convertor that I bought years ago for watching overseas tapes. The region code system is not subverted, and I have broken no laws. It's a pain in the ass and I shouldn't have to do it - my purchasing a legal, authorized DVD should be sufficient.
(It should also be pointed out that, contrary to the way it is usually reported, CSS encryption is not a copy-protection scheme. It is a patent-protection scheme, ensuring that any device capable of playing a CSS-encrypted disc has paid royalties to the DVD Consortium to get the decryption key. That royalty is what prevented open-source DVD players for a long time.)
Re: iTunes, for me the problems is not to much the DRM, which is pretty innocuous except for the hardware limitation you mention; it is the use of an audio codec that, while not proprietary, is not widely used. I've gone back to buying physical CDs in most cases. That, and the quantity of titles available on those durable little discs far exceeds what any on-line store has to offer.