The US is where Internet was born and, consequently, where it is the most developed. Yet prices for ADSL connections are way higher than in my country (Romania). I admit, minimum wage is way higher in the US, but still. Besides, prices for almost anything else, from food to clothing to electronics, are way lower in the US.
Long story short, a 20mbps adsl connection here is EUR12.5, meaning around $17.99. Taxes included. So.... umm.... what gives?

The media industry knows this, but their business model is based on percentage of sales. Quote from the paper in question: "While album sales have generally fallen since 2000, the number of albums being created has exploded.". The media industry is strictly interested in album sales, not in revenues to the artists. The fact that they invoke the artists in order to cause public outrage against copyright infringement is only normal: they use whatever means necessary to stay in business.

The unwillingness to change their business is another matter altogether, and can be discussed about all major industries. The bigger they are, the more difficult the change, and the more blindly stubborn their struggle to keep things the way they are. They will fall at one point though, when all possible sources of profit will be gone. Until then, they will make life difficult, or at least try.