They probably don't realise how unreasonable the demands are.
It doesn't really require a monopoly or any advanced technology at all in fact: there's nothing requiring anyone to offer music online in digital download form. They could just go back to only distributing it on CD, or even cassettes or vinyl. The rules are all because some parties really want to distribute music over the internet, and lots of consumers want this too. Remember, as someone else here said, the politicians are mostly dinosaurs, and to them, you don't need to download music when you can just go to a store and buy it.
The EU is pressured (and paid off) by media companies. It's the same root problem. Corporations having too much influence in government.
Then you really should avoid crying wolf for what's effectively pure speculation in this case. I also fail to see what "capture" you have here, people are still able to upload their track to Spotify, they'll just have to go through a 3rd party that will have to screen copyright infringement and make sure the metadata is in order. Meanwhile Spotify is free to focus on the big fish which is probably what they really care about. So who is capturing what in this scenario?
Regarding Youtube it's already effectively a quasi-monopoly, not because of regulation but because operating a free video streaming service at this scale requires insanely deep pockets. The only others that manage to stay afloat are mainly those who offer content that can't be hosted on Youtube (dailymotion, liveleaks, porn sites etc...).
I believe in well regulated capitalism, but I find that the EU takes things too far and does not worry enough about the unintended consequences of their rules.