Better for users, but not for producers.
Also, Matt has made the point that the vast majority of people are unwilling to donate when they don't have to.
I'm guessing you have thought though this situation much more thoroughly, and maybe have data on it too; otherwise, I'd be very surprised if things work out so ideally.
Those eyes and ears were supposed to be looking at ads, where more impressions equals a happier advertiser. It isn't obvious how that extends to donation-ware, when everyone can just move on to the next free source of music.
My favorite band is Radiohead. I didn't pay for their most recent album, because it didn't seem worth it. But I have paid over $200 to get 3 tickets to see them in concert this summer.
A few weeks ago, Papa Johns locations in north east Ohio gave away free pizzas worth about $5. People stood outside in the 45 degree weather, with rain, for 2 hours to get that pizza.
That said, I don't think this spells doom for micropayments. A successful "donations" model is Ben & Jerry's Free Cone day - a not-insignificant fraction of people donate to help various causes. I'd be interested to see statistics on this.
You could dial the support up or down, maybe giving a disproportional amount to a certain band.
I think you're totally right: unlimited and immediate access to music is just better.
But that doesn't mean you shouldn't directly support the artists.
The RIAA can't compete because they are fundamentally no longer part of the exchange. They add nothing. They continue through momentum, and will die soon.