I'm not going to get in the way of Matt's open-source advocacy, it's very much a heart says yes, head says no issue for me. I do think he's being a bit obtuse on the distinction between "making stuff" and infringement (it's fairly well understood that many of these programs are specifically made for the purposes of infringement but legally cling to potential legitimate uses, something Tim Lee explains well in this post), but his ultimate points are sound.
One thing, though, that confuses me. File swapping has always struck me as fairly easy to stop. The RIAA or the movie industry could simply purchase 15,000, or 30,000, or a million fairly cheap computers, pack their hard drives with audio files, hook them to the file-swapping networks, and flood every open file-sharing program with dummy files that, once downloaded, offer a symphony of top-volume screeching teenyboppers, yelping puppies, and sobbing children. If users had to sift through five of those for every usable file they got, the migration to iTunes would be so quick the UN would have to set up refugee camps.