Hey David!
Thanks for your contribution to the discussion. I think you have raised interesting points.
I would begin by asking you a question though.

"However, if just any business was legally allowed take anyone's "intellectual
property" and make money off of it, paying no royalties or anything, that
would be a problem."

Why would that be a problem?

"Unfortunately, in the case of music, video games and various other things, the
interesting part of making a polished, thoroughly enjoyable and/or useful
product is generally only some 10% of the work. The rest is just hard, boring,
frustrating work that will rarely ever get done without some other motivation
than the work itself."

This is a very fair concern.
I would say that I would not be interested in the question of free software if the only
proprietary thing in the would would be games.

For music and games I do have an answer for you. And this answer comes from seeing
the great advancements of the computer technology. Nowadays making music and even
movies is much-much easier. In Russia one of the political opposition people has announced
a song contest, aimed at the government. I am listening to what people have done and am
amazed - all of it is really good, on par with professional work, and most contestants are amateurs
who do it in their free time. Looks like this is not really a problem.

Games seem to survive today in spite of filesharing though. Do you think it comes from the fact
that most are multiplayer?

--
Louigi Verona
http://www.louigiverona.ru/