Copyrights are a tradeoff: content creators can make a living, while content consumers (the public) get access to the content. This tradeoff is beneficial to society. We all like content — and I'm specifically thinking about digital content here: music, books, newspapers, magazines, movies, software, web sites. We all want convenient access to content, including fair use, rights for criticism and parody, Internet radio with statutory royalties, etc. And we all understand the content creators need some way to make a living.
Intellectual property is intangible; the intellectual property system was created for the purpose of enabling the tradeoff between content creators and content consumers. This is not so different from other intangible property systems: real estate, bank accounts, and so on. The important thing with any sort of property system is to ask if it benefits society, or conversely, if getting rid of it would harm society.
Society needs to agree on the rules, or at least mostly agree, in order for a property system to work. The rules can't simply be imposed by one side or the other (content creators or content consumers). If both sides don't agree that the system is more or less fair, it will break down.
Content creators and consumers are both behaving poorly right now. You can see this in the jargon. Creators are complaining about "pirates": traditionally, scary dudes who roamed the sea, stealing gold at sword point — not exactly similar to the average copyright-violating music downloader. Meanwhile, consumers are talking about "sharing": traditionally, children in a sandbox with a toy that one of them owns — not quite the same thing as someone providing unlimited copies of a piece of music composed and performed by someone else.
Digital content and the Internet let people make infinite, perfect copies of content, at essentially zero cost. On top of that, copying simply doesn't feel like theft. This is leading people to reject the current intellectual property system. Rather than trying to change the rules of the system, people are simply ignoring the rules (and making whatever copies they want).
Content creators aren't doing any better. They (or their representatives) are suing their own customers, including grandmothers and children, which is not exactly a sign that the system is in good shape.
As an aside, some content consumers are claiming that musicians can make money from live performances and t-shirt sales. But that doesn't really solve the problem. Some musicians can't make money in those ways, and other content creators (novelists, software authors) don't even have those options.
One interesting note: the content creators' side has engaged with the government — by lobbying for an ongoing series of new laws. The content consumers' side hasn't engaged at all: I haven't seen any proposals that would support both sides of the tradeoff mentioned at the start.
The copyright war has become a black-and-white thing — you're either for copyrights or against them. I see it as more of a gray issue: the system needs to be changed, but I don't think we should just throw the whole thing out.
If we, as a society, don't agree on the rules for the system, the result will make all of us worse off. If content creators can't make a living, they'll stop creating content. If content consumers can't access content in convenient form at reasonable (to them) prices, they'll make unauthorized copies. I'm not arguing that we should keep the current system with no changes, but we need to agree on something.