How about "for non-commercial use only" as the discriminating rule for copying? Seems like that would get right at the heart of the ethics of the situation. Art belongs to the world, but the artist controls the right *profit* from it.
That would also dovetail nicely with maintaining venue owners into needing a license for public performance. Unless of course the performance/venue is completely nonprofit, which obviously doesn't apply to movie theaters, bars, etc. that expect to make money off the people that the performance. helps attract to their establishment. If we want to carve another exception, that's a separate question.
As for hypocrisy - hardly. Change the rules for all new copyrights granted from this day forth, and the artists know exactly what deal they're getting. (And it's a considerably better deal than they've gotten for most of human history.) If they choose to continue making art, and as a nonprofit artist I can guarantee you that many will, we should feel happy to view it. And if you want to encourage someone to make more/better art, you're welcome to send donations, contribute to crowdfunded projects, etc.
Such a tactic might mean the end of expensive blockbusters, but that business model has no special right to continue to exist. Especially if it depends on criminalizing the vast majority of the population.