Your response can be defeated by tweaking their statement, for charitable interpretation, into this: "Without profit, people couldn't have created [most of] those things in the first place [that people want the most]."

It's not the free, hobby stuff that's giving IA trouble. And if you look at what people are consuming the most (games, books, movies, tv shows), they obviously prefer the content made by people trying to make a living, not the free-time hobby projects. The biggest games on Twitch are League of Legends and Fortnite, not The Battle of Wesnoth.

Pointing out that people will make some content for fun doesn't really mean much because a world where we depend on hobby/passion projects is obviously not the optimum. I want someone to profit by making the exact content that I want.