Live performances are a different act than recording and selling albums. Live performances are always (?) allowed, but IIRC, the songwriter/composer is due a royalty.
How often that happens in real life is a question, but live performances (currently) have a different set of rules.
Playing songs live != repackaging recordings. Not even in the same ballpark. Venues of size pay licenses to ASCAP, etc. for the rights to let cover bands do this -- but it's also a usage that requires a lot more factors than just copying the song. At least in the U.S. these uses are pretty much automated vs. negotiating rights to reproduce a full album or even a single.
(Tribute bands are another animal entirely - I'm not sure how or if the various Pink Floyd tribute bands, for instance, negotiate deals with the original bands since they're not just covering the songs - they also get into likeness rights and trademark, etc.)
Yes, indeed. Will it be harder for indie bands? I don't think so. Will it be different? Sure. Will it be better for the society if you could have live concerts or disco parties with great songs? Absolutely.