Interesting and well-thought point. You know, your whole point about ‘real work’ reminds me of an article I heard of about a tribe somewhere in Asia, still technologically inferior to most third-world countries. Basically all they ever do is gather food (hunt) and rest at home. Thing is, they barely spend any time each day hunting, so they have a heck of a lot of free time. They don’t have a super-high life expectancy, but most of it is happy and spent socializing.
The only problem I have with your argument is that it doesn’t account for audience acceptance. In a world of free art, people who don’t understand an art piece, can’t play a game, or see plotholes in a movie, would get a reply of “Well I don’t care. I made it for free, so you should be glad.” What drives areas like game design forward is the idea of making something that appeals to as many people as possible, and the fact that the guy who does so will rake in millions. You just can’t count on all artists to be good-natured or want to appeal to their audience. Thus, you have the need for incentives; a game selling well earns them more money.