Some of the best music/songs ever produced were made as a hobby, not a job.
And is that outcome necessarily a bad thing? I believe, as an earlier poster stated, that the buggywhip makers and blacksmiths felt the same way a hundred years ago. And you're right - making music might be a hobby, just like the buggywhip makers and blacksmiths are today.
That being said: people in general are weak-willed; most folks will steal anything they can easily carry away as long as "everybody does it" too. And since there's no way to stuff the digital-music genie back in the lamp, the cold hard fact is that downloading (=stealing music) is here to stay.
Now, if you're saying that this means the death of the zillionaire touring "rock star/country star" icon we grew up with, then yes, it does -- but that sort of thing was always the creation of the recording industry anyway. Music has been liberated from that prison; they quit selling 45s years ago, and WLS isn't broadcasting Hank's latest honky-tonk hit from the stage of the Opry anymore. Information and media have been divorced: instead of selling expensive physical disks based upon exposure via nationwide radio/MTV airplay (based more on media hype and payola than quality), performers will now give away digital recordings of their works (they'll have no choice!). With these artist-sponsored free copies acting as promotional items, fans of the music will hopefully be driven to hear it performed live, thus providing income to the artist. Sales of t-shirts, posters, and other fan club items will supplement income from concert performances, and popular artists with big audiences will further profit from corporate sponsorships and website ad sales. Every artist becomes his own label! Yes, that means less money for most -- but it also means no suits to mess with the artistic content (or take their cut off the top)!
From now on musicians will have to build their audiences the hard way -- no more major-label hype, no more gifts to big-market jocks in exchange for airplay, no more shipping plastic disks around in trucks. From now on performance and presentation will draw the crowds; from now on sounds and skill are king.
Like it or not, recorded music is free from now on. The bad news (to some) is that the age of the major-label Music Superstar is closing. The good news is that the MTV/radio/RIAA "axis of evil" is dead as well -- and thus control of music to the people who create it -- the musicians -- returns.