The state allows IP so that creators can be rewarded for their efforts in the hopes that this will allow various industries to flourish.
But such IP has limits. Patents can't be granted on certain things. For example, India does not allow patents on certain (all?) pharmaceuticals because it views low-cost health care for its citizens as being more in the national interest.
The US does not allow the patenting of nuclear technology.
Copyright has term limits, typically being X years after the death of the creator, although lobbying has steadily increased this limit (the so-called "Mickey Mouse" law).
The idea is that at some point copyrighted works will pass into the public domain because that's in the public's interest without needlessly enriching countless descendants of the creators.
Copyright has other limits: fair use, use by nonprofits, education use and so on.
You may not even be aware that there is such a thing as compulsory licensing [1], which allows you to pay statutory royalties and use something without permission for certain enumerated purposes.
Basically, copyright (or any IP for that matter) is not absolute. So we're simply haggling over what those limits are.
As an aside, the content creators themselves, apart from a very few, don't derive significant economic benefit from their works (particularly in the music industry). What you're really doing is simply protecting the intermediaries (being the record companies).
So arguing that they have the right is not only incorrect but it misses the point entirely: those rights exist by the grace of the state for the perceived (alleged?) national interest.
"Stifling innovation" is not really something worth arguing about (in the sense of having a right to do so). Any protected industry fighting the tide still loses in the end. The genie never goes back in the bottle.
Look at the millions spent on lobbying Congress to pass crazy laws, abuse of the judicial system for mass lawsuits, PR campaigns and so on. Have they stamped out piracy? No. Have they killed the idea of and the desire to download content over the Internet so we can all go back to buying CDs from the corner record store? Hardly.
The writing is on the wall. So legislation is important too obviously but here it's only an issue because the various industries are so intransigent to the inevitability of change.
Also I'm not arguing for or against the whole RIAA thing, I think it's moronic how they refuse to innovate and (in my opinion) make more money, however my own opinion of how stupid they're being shouldn't over-ride the (moral/ethical) "rights" of a content creator. If I make something I sure as hell want to decide what happens with it.
I think there's a huge moral difference between your right to your shoes and your right to some idea. Here are some things that make it hard to believe IP is a good fundamental right (in the sense of Locke):
* Bob and Joe on opposite sides of the world have no problem with each owning a pair of shoes. But if Bob invents a device on Tuesday, and Joe independently invents in on Wednesday, why should Bob get everything and Joe nothing? Yes, from a practical standpoint it's necessary to give patents solely to the first-mover; otherwise people would pretend to invent existing things. But why should time-of-invention matter morally...at all?
* Should Shakespeare's heirs (or, more realistically, a copyright-holding corporation) really be able to dictate how his plays are used today? And forever? If not, what moral principle would we use to choose a time limit?
* Why, if IP is a moral right, are mathematical theorems not ownable?
* It's not to hard to distinguish things which are physically ownable, but where does one draw the line with IP? How detailed must my graphic design be for it to be mine forever? Can I own all green squares, or only green squares inside of blue hexagons? Legally, the threshold for copyright is set to try to maximize societal benefit. But if copyrights are moral rights existing independent of any legal framework, on what moral principle could one decide what's copyright-able?
This is your axiom that others don't necessarily hold to be true, and the root of most IP disagreements.
If they ever did -- which they didn't -- they don't now. Deal with it, and get over it.
1. Content owners are stifling innovation in the industry as they try and bolster dying business models. This applies to content including music, TV, movies and books; and
2. Intellectual property, particularly in the US, is a complete mess (which this is but a part of).
(2) is important but let's not lose sight of the fact that if the industries themselves were forward thinking, this wouldn't even be a problem. (2) simply allows them to be somewhat more of a problem than they would be otherwise.