I agree the system has some major flaws. It is better than the alternative system with the RIAA prosecuting people for 10,000$ per song in my opinion. I don't want my money going to poor 'artists' that are just manufactured entities by massive labels. Luckily the recent rulings do not support a levy on digital music players or digital storage devices.
Your proposed problem to focus on solving would drastically improve the American system if changed, so I hope it happens.
One final point I would like to add: I did not purchase music in university when I could not afford the luxury. Since I have improved my economic situation, I have recently purchased various older albums. I think that is a good example of how the system can potentially be successful.
Ask 10 people whether they'd rather give $1 to Clay Aiken or see a single mom sued for $2,500 for illicitly distributing a Coldplay album. You're right; they'll all fork over the $1. But they'll all have to think about it for a second.
(1) It's a tax on everyone that, at least in part, takes money out of reasonable people's pockets and gives it to Miley Cyrus.
(2) No equitable mechanism exists to apportion that tax revenue, with an end result that Nielson SoundScan becomes social policy.
The problem with copyright isn't copyright. The problem with copyright is that the music distribution channel is controlled by a small, intertwined group of cartels. We should solve the right problem.