Had they not tampered with the copyright laws in the U.S. (particularly with the infamous Bono act), many things would have slipped freely into the public domain after a reasonable period for the writers and performers to profit as they chose. But cold commercialism, widespread copyright abuse, greedy litigators (it only takes one to ruin you) and copyright laws unfavorable to "folk evolution" are facts of modern life--ignore them at your own risk. If the laws bother you, why not raise a stink with your congressfolks instead of shooting the messenger?

As for why the Smithsonian and Library of Congress can make their recordings available, (1) they or the collectors mostly obtained signed releases at the time of recording and (2) they enjoy special legal status.

Re the ethics of recording "for yourself": first, the decision whether to be recorded rests with the performer. Granted, as others have pointed out, in some environments permission is implicit by convention. This still does not automatically confer permission to use the recordings however you will. If you record without permission, or if you later decide to start copying those recordings for others, you've crossed into muddy ethical territory, and a possible legal morass as well.

Furthermore, why only after collecting thousands of such recordings for decades are these questions coming up? The thought of archiving them or trying to profit from them can't only now be arising--no one is that naive or stupid, and copyright is hardly a new or obscure issue. So it mostly sounds to me like someone trying to evade the restrictions which other serious collectors abide by, simply because he was too lazy to get releases then or in any of the years he's been recording since. If there is any "tragic loss" due to this negligence, the fault is solely his own.