I think this is a pretty cynical way to put it. It’s not that the internet developers weren’t “tough enough”; it’s that they made the mistake of thinking that the music industry was an actual business with the goal of making money and therefore that it might be interested in strategies that were designed to get their music to more people in new ways out of a belief (garnered from the repeated history of the net) that some of those ways would eventually lead to new business opporunities.
Unfortunately, the music industry isn’t actually a business; it’s a network of middle-aged dudes-in-suits who hold a death grip on a small number of valuable commodities that they neither created nor understand: the back catalogs of a number of immensely successfull acts from the 50s through the 90s, an armory of media outlets that inspire the attention of a large, if dwindling, population, a certain sense of romance for a large, if, again, dwindling, group of musicians for whom the fame they can create represents highest virtue.
They’re more like decadent old nobles in the 18th century after the collapse of the economic system that supported them: poor in wealth but rich in refinement, status, and, above all, greed. Describing the industry types as hard-headed realists and the tech upstarts they ruthlessly destroyed as fuzzy-headed idealists valorizes their position in a way that is, at best, amoral.
I find this whole “sue ’em all” thread to be incredibly sad. What we’re really doing is writing the eulogy to the recently departed era of optimism for music on the web. Unlike the story in nearly every other industry, in music, the villains won. The past beat back the future. The labels managed to scuttle the whole industry — from its economic might to its cultural relevance — in order to prevent the rise of any digital rivals.
Nowadays, when you hear people talking about music excitedly, they’re more likely to be discussing delivery technologies (iPod, Amazon, or blogs) than a great band that they think is absolutely going to be the next big thing. It’s not that there isn’t great music being made or that people aren’t finding it, it’s just that people have lost their faith that the great thing they’re into could ever find a wider audience, that there even is a wider audience to be found.
In the long run, this may turn out to be a good thing. Once the labels are done withering a way, once they’re well and truly gone, music may go back to being a folk art again: with local acts (whether georgraphical or hypertextual) filling local needs. At that point technology may be able to try to help again. But, until then, all we can do is grieve and setup signs for future developers who might come this way that say: “Toxic. Keep out.”