Are you basically asking that if people can make music for themselves, why would they listen to anyone else’s? I think we already know the answer to that. Most of us can string words together, but we still read other people’s writing. For every JK Rowling, there may be a million story writers sharing more personal tales with friends, but there is still a publishing industry. Why shouldn’t an appetite for creating something, from stories to music, stimulate an appetite for enjoying other people’s creations, especially when some of those creations are brilliant things you would never have thought of?
As for the specifics of Looplabs and the music industry, tools like this have been around for years. Construction block-based music has been around since Acid’s launch in 1998, and comes free for every Mac owner in GarageBand. Music as a pay/play industry is still going.
Music is not the industrial tool it once was for turning plastic into gold. There is not as much cash around as there was when they could keep reselling old recordings on new physical formats at very low cost for premium prices. But this does not mean the industry is failing. Rather, it has to work harder on the more exciting and risky bits, finding and supporting talent, which costs a surprising amount to do really well.
I work in radio, and I’m always looking out for songs to share. I’d love to find more good ones. If anyone is thinking the music industry is deaf because there is a talent that’s being ignored, please let me know! I want us to get better at finding and sharing things which excite and inspire people. I think most people who like music will still enjoy the fruits of that, even if it does get easier to string some beats together at home.