I'm not sure I'd call compensation via tax revenues a reasonable solution to bad actors in the DRM field.
Here are my bona fides: I'm a writer, and I'm seriously considering self-publishing, at least for digital formats, and I like things like food and my house, so I'm definitely sympathetic to any idea where the end result is my cashing a check. Also, my cousin is a comic artist who married a Canadian (we still talk to her, though) and moved to BC, partly because that's where her husband is from, but also partly to get a piece of that good ol' Canadian subsidy money.
Let's say you do something like a Canadian-style subsidy. It's a little tough to find the standards, but here's a copy I found via Google: http://www.ahcf.ca/images/SubsidyGuidelines.pdf
The standards are in Appendix A. Anyway, in a Canadian model, here are the problems I see. You have to meet four out of a list of something like eight qualifications in order to be considered an artist, and it looks like it's totally possible to meet your four without ever actually selling a piece of art (or a story, or what have you). Well, you might say, that's why you need a subsidy. Yes, but sometimes people don't pay for things because they're really, really bad. There's no qualification that the subsidy only goes to good art, or art that people want to see/read/hear/whatever. Is that important, or even ethical? You bet your ass it is, if it's my tax money going to pay for it.
Incidentally, those standards are set by the Canadian government. The government. That should turn half of /. against the idea right there.
Interestingly enough, although it seems possible to get a subsidy without producing art that anyone else wants, it looks like there's no way to get a subsidy without being a member of a professional organization or a student at a university. So, if your "free as in speech" panties aren't bunched by the government involvement aspect, there's the fact that you'd almost certainly have to be a member of an organization which is going to set some sort of requirements on your particular bit of art, be it peer approval, professorial approval, membership fees, or tuition. Ultimately, if you take the dole, you're compromised in some way.
Also interestingly, if you Google "Canadian art subsidy", most of the hits are complaints about it, including several saying that the net result is crappier Canadian art.
As far as I'm concerned, my cousin's got a contract with Image, and doesn't need the cash, and I don't want to be on art welfare, unable to sell anything in a flooded market because all of a sudden being a professional writer doesn't actually require talent anymore. If you're fine with socialism, which a surprising number of slashdotters appear to be, then good on you. I'm sure the idea of state-subsidized art (which we already have in the US in the form of various grants and so forth) is appealing to you. I'm not, because I don't want to pay for crap art, or art I don't like, or art I find insulting, and I also don't want the government to decide who is and isn't an artist. Sure, getting a subsidy doesn't make you an artist any more than not getting one makes you not an artist, but it does give an unfair advantage.
And, frankly, if someone likes my stuff enough to steal it, I'm flattered.