Surely to some degree, the DIY ethic that came with punk started to make the music industry obsolete. I agree that it was the more specialist shops that stocked the records, so if your nearest record shop was a big chain, it took a trip to the nearest reasonable sized town or mail order to get your treasured piece of vinyl, but it started something that didn't end in the 70s. Add to that the reduced price of getting CDs made, software such as Audacity and the internet and there's much more potential these days for bands to make a living through their music. It might not be much of a living, but it isn't for an obscure band that happens to be signed to one of the major labels either - I know people signed to the likes of EMI who need a second job to keep a roof over their heads - and they don't even own their own songs.
The way it seems to me, the industry is good for getting airplay and CDs into shops, but there's an increasing number of radio programs (in the UK at least) that are playing independent bands and shops seem to have more open minds, so the point of the industry seems to be vanishing. It might mean that managers become more powerful for the likes of Britney, who I doubt would be up to sorting things out for herself, but I don't see a problem if "artists" like that disappear or their managers have to do a bit more work than getting their pictures into the tabloids. My guess is that the major labels will have to think of something big to return to their glory days and not turn into companies that have litigation providing a major part of their income. They will continue to get most of the money from top ten acts, but it keeps getting easier to get music that isn't promoted as part of the mainstream, especially with electronic distribution.
