Not being able to make a living producing something that no one will pay for sounds very much like a natural, preordained process to me. I can't make a living manufacturing buggy whips or operating elevators anymore. Technology made those jobs go away. It's sad perhaps, from a nostalgic perspective, but the world moved on.
If a business model needs "defenders" in the face of technological change then it's no longer a viable model.
I don't believe a transactional model is the only one that can work. It happens to be convenient for a certain type of creator, but that doesn't mean it's the only one.
I will clarify that I'm most certainly not anti-copyright. I think a lot of value can be derived from a copyright regime based on a more balanced social contract. US copyright law, and those who have "harmonized" with the US, has shifted much too far in the direction of favoring the owners of "intellectual property".
I also don't understand how it is that you're describing books as "the most precious products of human toil", but you're simultaneously saying you're happy to sacrifice them if it means you get copyright reform.
And I also don't understand how copyright law is screwing up your "technology". It screws up your ability to get certain things for free. But if someone wants to create a DRM-free ebook and give it away, they are still perfectly able to do so.
Unlikely and definitely unproven. Historical precedent rather shows that at least 96 % of the books would be produced even without copyright, given less than 4 % bothered to register the copyright when it was mandatory. And less than 1 % of the 4 % required a copyright term longer than 14 years. https://archive.org/details/howtofixcopyrigh00patr/page/104/...
If tomorrow Congress repealed the Berne convention and shortened the copyright term to 5 years from publication, in order to make the Internet Archive's "National Emergency Library" permanent even without fair use, probably a good 99.9 % of the works would still be produced.