Whoopty-doo, Big name acts can get away with this. (Radiohead, NIN, and others)
I think it seems like the small and mid-size acts have a codependent relationship with their labels -- the bands bring in album sales the label brings them customers.
Dirt cheap home computer recording methods have dramatically increased the amount of music. Love it or hate it, games like guitar hero are spawning new musicians. Budget guitars are $50 at target. There is just more and more music and musicians out there, which is a great thing. The small and medium sized bands still need some sort of promotion to get to their next respective levels -- labels provide this service and do it very well, they also take most of the profits for themselves. No one else has been able to replicate this high quality service at a low 'cost' to artists. Independent labels may be better at sharing profits, but they still affect the bottom line.
Some services like last.fm and yahoo music have helped me find great music, but I have had to dig for it or listen to genre/artist focused stations. I can't wait to see ways for the little guys to break through and maintain momentum without labels taking advantage of artists.