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Absolutely. Or they could design stereos that are more difficult to steal. Or they could work with police to shut down the markets for stolen goods. But they are competing with stolen goods. Pretending that they aren't doesn't solve the problem.

No. But there is a major economic difference: If a car stereo costs $200 at retail, chances are that divides up as something like $125 for parts and assembly cost, $25 transportation costs, and $50 profit divided among manufacturer, middle-men, and retail outlet. For a digital download, "parts and assembly" costs (payment for studio time, session musicians, etc.) are a few thousand dollars ONCE, then never needs to be paid again, transport is dirt-cheap (on the order of pennies per track, even lower in volume), and once the initial costs are recouped, close to 100% of the consumer's cost is profit to the record company. (iTunes has a lower profit margin for the record companies as Apple gets a cut as well.) You will NEVER find that with a physical product.

And I would happily buy a car stereo (or GPS device) that retails new for $200 for $50 at a pawn shop - assuming that I'm fairly certain the owner of the pawn shop was not knowingly in receipt of stolen goods.

It depends. Are these magical, self-cloning car stereos and GPS devices? No? Then your argument holds no water. It is not even a question of apples to oranges. At least those are both fruit. Copying and stealing are completely different. As much as I do not want to explain this yet again, I will. When you steal my car stereo, you have deprived me of it. I must then purchase, at my own cost, a new one. When you copy my entire music library, there is no deprivation involved. I still have my music library, and you now have an identical reproduction of it.

Once you realize the differences here, the situation becomes a purely moral one. Is it ethical to share what you have with others, if doing so deprives you of nothing? What about the corporate music industry? Is it ethical to deny these major labels a profit on something which can be so easily reproduced with such a miniscule amount of labor?

Musicians, on the other hand, are different. They are the ones who create the art. Even so, however, that does not mean that the creation of this art fits the established definition of "labor." Any musician who plays or sings for the love of it, which is as it should be, does not view what they do as labor. Creating music is not the same as an eight hour day in the cube farm. It is not a chore. It is something done out of love and often necessity. You could compare it in some ways to why Open Source and Free Software developers do what they do. It is like an addiction.

Still, artists should be compensated accordingly for their live performances, and donations in exchange for copies of their recordings would also be nice, though not necessary. The issue is that musicians are regular people as well. They should not be treated as some sort of royalty and end up millionaires. They should be able to bring in enough from their music to support themselves, of course, but twenty cars, four mansions and a private jet is absolutely ludicrous. Also, what most major artists make is a drop in the bucket when compared to what the music executives take. Food for thought, that.

To wrap it all into a neat little bundle: Cheap recording equipment, along with peer to peer and other technologies made possible by the ubiquity of the Internet, should be utilized to cut out middle-men completely. The antiquated music industry should be completely destroyed and replaced with a system that allows free copying and trading of music. Artists would become popular by, what a novel idea, the people deciding whether or not to listen to them. They would support themselves via live performances, merchandise if applicable, and donations from fans.

Buisinessmen should not have control over an art-form.