I disagree -- your argument is essentially the same as the RIAA/MPAA: "Unless we protect music, artists won't get paid and they won't make music anymore". Which is complete & utter bunk, because plenty of artists make music without ever making a cent in profit. People may not continue to do what they currently do -- in fact, a great many (myself included) would not. But we WOULD find things to do instead that we enjoy a lot more, and are probably much better at.
Maslow's hierarchy of needs is in effect here -- when basic survival needs are taken care of, then you move up the pyramid eventually getting to esteem & self-actualization, where people WANT to build things, achieve recognition, solve problems, be creative, etc. BECAUSE they want to. BECAUSE they want to "be good people".
Some people do what they need to, because they our society is NOT setup to care for people's basic needs (food, shelter, security, health). And if society did start caring for those basic needs, yeah -- some people would probably just sit around & be lazy, at least for awhile, because they only know how to live in scarcity. Just the way that poor/middle-income people win the lottery & ruin their lives, because they don't know understand how to live with money & security. But within a generation (perhaps less), I think a great creative energy would be unleashed.