Yet the works everyone wants to actually consume aren't the weekendware creative-commons hobby projects, so it's clear to me that copyright (well, IP in general) is responsible for the most compelling content.

Nothing is stopping people from releasing their passion projects to the world without strings attached.

That is debatable. We remember a few high-profile works that have stood the test of time, but how many Mozart symphonies or Mona Lisas has human society produced in its past, and how does that compare with the quality and quantity of new works produced today?