So? This is how it has been for centuries. Call it the invisible hand meets the art world. They can get jobs being music teachers. They can record using vintage equipment, like Blake Schwarzenbach did (used 4-track and 8-track recordings while he wrote for GamePro).
>If anything, it will kill the indy scene because the only companies that will be able to even come close to a profit are the the ones with deep pockets
Something tells me you don't understand the definition of "Independent Music".
The fact is, the labels function as a market for pump and dump stocks, where the stock is a band or album. Independent music doesn't (or in my opinion, shouldn't) work that way. It can take 5 years for your album to blow up. (See: Mumford and Sons). You might have a bigger following only after you're dead and buried (See: Elliot Smith and Bright Eyes). You might have every single one of your fans wanting you to quit your main gig for a side project they've done (See: Death Cab For Cutie/The Postal Service).
Disclaimer: I am a founder of a failed start-up company that would work with artists in a way that was designed to supplant the labels and exploit long-tail effect, etc.
The sad, sad thing is that indie bands are getting picked off quicker and quicker by labels and pumped up for the first-album success. It's actually a huge issue (read up on MGMT) when the artists then try a new direction for a second album and the label is hesitant to financially support an album unless fans move the product in the first two weeks. This becomes at catch-22. How do you enjoy the success of radio play when nobody's paying to play you on the radio? This leads the labels to relegate these bands (by the second or third album) to a "we don't help you" status, forcing the band to break up or just be a small indie band forever on tour.
If anything, major labels playing in the indie scene is akin to making the indie bands "build on a flood plain".
TL;DR: NOPE. Artists make very little money from albums. It is known.