When you consider that The Spirit of Radio was written in 1980, it really puts in perspective how long the recording industry has been dictating exactly what becomes popular and what doesn't. As Rush say in the song, "the words of the profits are written on the studio wall."
There's another aspect to the idea too, of course. It's not just about the RIAA and its cronies choosing what will become popular, but also forcing artists to change their work. The power they must wield is somewhat frightening--you want us to release your record? Well, then change these lyrics here, cut out this part, sell your soul to get your record cut.
Rush again, who say it better than I ever could:
But glittering prizes
And endless compromises
Shatter the illusion
I really believe that digital recording and distribution, once it really starts to take off, will revitalize the music industry and get us back to the basics--artists getting their music heard, and getting rewarded fairly for that.
And leaving the fat cats out of the loop.