Quickly dipping in...

Ethical or not, musical culture has simply changed (once again). Musical consumers habits have changed. Technology changed it. Just as the industrial revolution destroyed the oral tradition in the first place (and that had been around a lot longer than the record industry). It's out of the box and I can't see anyone putting it back in again now.
Unfair it may be, but artists must come to adapt to the new conditions they find themselves in. It seems people are going to live gigs much more again now - and that's where the music industry is making money, not in records. I don't necessarily see that as a bad thing.

Confessional: as a kid I used to get tapes off mates. In my twenties I bought shed loads of music, that I would sometimes loan to my mates. In my thirties I've bought less of it (due to financial restrictions), but I never bothered with downloads (legal or illegal). I did do so however *for the first time* last year when I illegally downloaded between half a dozen and a dozen albums (I couldn't name them - so I've no idea if they are still available), each of which I listened to a couple of times a piece before earmarking those traditional songs I fancied learning to sing.
I probably learned no more than a dozen songs off of those albums. But they were indeed very useful for a couple of months. YouTube however has proven to be a much more valuable resource to me since.

I don't read music (though I'm teaching myself now) so for me it was a purely pragmatic exercise. I'll delete them from my iTunes when I get around to tidying up what's on there, because I never listen to them for the sake of it: despite the fact that I sing traditional songs in pub sessions, I've not yet gained a personal taste for listening to revival folk records - and I suspect I probably won't. Live music on the other hand.. Well I'll definitely do a festival or two this year.

I'm sure the vast majority of people on this thread will deeply dissaprove of my actions. But there was no way I was ever going to buy those albums. I guess if I wanted to be strictly principled I could look up the songs I learned on Amazon and pay for them individually.

But overall, whatever the rights or wrongs of it - it seems to me that musical artists will simply have to come to adapt to a radically changed musical culture.

P.S. My thanks to those traditional folk enthusiasts here (who will remain nameless) for pressing upon me further helpful bootlegged material - I'm looking forward to the promised ballad selection very much indeed!