occam said:
I'm genuinely curious about how people see this working with a serious consideration of human nature; I don't, but maybe I'm suffering from a failure of imagination.
As I stated previously, this needs social change, the basis is already there. Ask a plantage owner 200 years ago if the abolishment of slavery was possible, they would have reacted much the same as you do now. The same goes for racism, equal rights for women, freedom of religion, gay rights, etc. All these things weren't introduced overnight and certainly weren't easy. I'm not trying to equated copyrights with slavery, but rather pointing out that even difficult changes have ways to succeed.
Even now Open Source Software is being developed for 'free'. Certain companies dedicate programmers to the development of OSS, because this makes the software more valuable to them (and in turn to the rest of the world). There will always be people who love what they do and will do it whether they are paid for it or not. But the question is then of course whether this is enough material to sustain the entertainment of mankind and if it's of high enough quality. If it's not, then you'll get folks that want something better, they'll pay something to create. Whether that's n individual that finances a writer for a book or a community that finances a film, or a state that does both. Imagine that instead of paying for all the copyrighted you buy now, you'll pay a 'tax'. That is a huge amount of money, no one is trying to get rich off it, so essentially everything can go to the creators, instead of all the support staff (marketing/finance/it support/management/etc.).
Technology also plays a huge role in this. We're moving away from media carriers such as paper, disc, and tape. Music can be easily downloaded and played on a digital media player, television and movies can be streamed (or downloaded), and books can already be read on digital paper that can be reused for a decade. Actors can already be almost be replaced with 3D characters (Beowulf/LotR battles) and music can be created without an actual instrument.
Imagine that when you go to the movies, you don't actually pay for the movie, but for the huge screen and soundsytem that is used for the duration of the film. Hardware you'll need to buy, because those still are physical products, and cannot be copied infinitely without consuming resources. But the development process could work in the same way as the software/media as described above.
Will this happen? Possibly. When will it happen? The next decade will make the technology readily available and the newer generations will get more comfortable with Open Source, not to mention the idea that information should be 'free'. Currently the corporate funded institutions that try to fight 'file sharing' (such as the Riaa) are already ineffective at stopping consumers, and instead concentrate more on groups that earn money with 'piracy'. Many governments already allow some form of file-sharing without legal consequence...