We decimated recordings as a revenue stream (and literal decimation might be wildly generous, given that stream payouts frequently never add up to a single sale for many artists). We let people peddle the lie that artists can just find some other revenue source like merchandising or another job or anything else rather than paying for the thing people ostensibly value.
Minor league success was never an easy proposition but we had a chance to give it better margins. And we let Spotify and others eat those, and let too many people tell comforting lies to consumers along the way.
And without a major cultural shift, we will do the same thing for everyone eventually.
a) just a theory not a proven thing and
b) based on flawed assumptions that were quickly disproven. See the 2008 paper "Should You Invest in the Long Tail?" finding that consumers don't like niche products and the bottom 80% sold $0, contrary to the theory's prediction.
https://www.hbs.edu/faculty/Pages/item.aspx?num=32337
Had nothing to do with merchandising or whatever. The Long Tail was never correct.