When the music industry was “Napsterized” by free file-sharing, it suffered a blow from which it hasn’t recovered. Since music sales peaked in 1999, the value of the industry’s inflation-adjusted sales in the United States, even including sales from Apple’s highly successful iTunes Music Store, has dropped by more than half, according to the Recording Industry Association of America.This is the fallacy of "post hoc ergo propter hoc". Or, in English, A happened before B, therefore A caused B. If you listen to the RIAA, they'll tell you anything. But all you really have is correlation, not causation. While peer-to-peer is probably a factor, there have been a whole host of economic and market changes in the intervening years which could also be responsible.
And then there’s this gem:
I will forward the suggestion [that writers learn from the example of bands who give away content for free] along, as soon as authors can pack arenas full and pirated e-books can serve as concert fliers.
Why does nobody ever remember Baen and its Free Library?
Here’s something to refresh Mr. Stross’s memory, from his very own paper:
This strategy has also been used by folks such as Cory Doctorow and another writer by the name of Stross—Charles Stross. It doesn’t exactly seem to have hurt them either.
Now, this strategy wouldn’t necessarily work for all forms of content, and the choice of whether to give work away for free should always reside with the creator of that content—not the pirates. But pooh-poohing the idea that it CAN work in this way is completely asinine.