There are other issues too, he mentions that some bands have had little success with a Doctorow style business model, but most bands fail to make a living period, and he can't provide figures for how many succeed with each given model (I wouldn't expect much difference, most of the smaller bands I listen to subsist on live performances, not CD sales, but it could be significant for a few).
His second point (giving away books is not a loss leader) may be true for books, I'm more familiar with give away models in comics. However: A) The physical book has a value above and beyond the information itself, since some people will want a physical copy. B) A substantially large online following means contributing ad revenue (not enough to live off on your own probably, the best I've seen is maybe 60 dollars a day). C) Its called merchandising, the merchandise doesn't even have to relate strongly to the work in question, Jeph Jacques basically uses Questionable Content as a way to get free ads for his T-Shirt sales for example.
His third point, that giving away books damages publishers and bookstores: Partly true, Again point A above, physical books still have value. Also fuck them. You are not entitled to a business model being successful. I'll care about bookstore corporations just as soon as all those tech jobs I was promised when I was in high school come back from India. Also, Amazon.com, both in digital and physical book sales, probably does far more damage to brick and mortar book stores.
His fourth point, that that the model requires people to rely on lecture fees: No, it requires them to rely on anything else. Lecture fees are a good source of income, but there are other options. Like selling physical copies of your books to people who want them. (Seriously, people will never stop hoarding, its part of human nature, there will always be a market for physical books to satisfy our instincts). Secondly, the idea that not all authors would be successful on the lecture circuit still lacks a comparison of how many authors fail today. The figure I've heard is 9/10 published books lose money, more barely break even on printing fees, and that doesn't include the stuff that never gets published in the first place.
fifth point: Yes Doctorow relies on talking about giving things away, That works for him. Sam Harris talks about how we should nuke the middle east, that works for him too. Other people I read have never given a lecture in their life.
sixth point: that tips are not equal to the pay from book sales. You get more readers/listeners by giving away than sales. A lot of those people are horrible freeloaders who will never give *anybody* another dime, (in other words, people with library cards). You can't assume you'd have a 1 to 1 relationship on book sales versus people who read your stuff when its free.
seventh point: giving stuff away is a luxury of those with a different source of income. Totally true! Every last person whose stuff I read for free either has a second source of income, or used to have a second source of income (or a large savings account) while they established themselves. However, thats not very different from the traditional model, there's a reason 'starving artist' is a cliche. Again, comparison in success rates are needed.
eighth point: again, exactly right, people who give things away are (with the exception of television) self employed, that means doing your own marketing work. Being a small business owner kindof sucks like that.
Holy shit this thing is long, the rest looks like generic rants about Doctorow in the specific though, so I'm not going to address it.
tl;dr: Making a living off of your art/writing is a pain in the ass, regardless of the business model.
