why
Here's why things are going downhill:
Government regulation favors the big corporations that pay candidates' electoral costs, customers tend to favor those big corporations because they let themselves be led around by the nose (well, by advertising, really), and the big corporations have the money and legal talent available to crush smaller competitors (especially when they have the patent system available as a means of launching spurious legal assaults on competitors who don't have the money to build a massive patent portfolio). Small, entrepreneurial concerns are the places where creativity makes it to market.
In short, what you describe is only one of three (or more) major components of the problem that faces us. We, the consumers who want better "products", are another of them; the third is the fact that power feeds its own growth and unassailable strength directly.
It feels, sometimes, like those of us who recognize there's such a problem (including you and me, among others) are modern incarnations of Cassandra, able to see the truth but unable to convince anyone of that truth. All we can do is fight against the tide, I suppose, and hope that the tendency of technology to distribute power more widely will somehow win out in the end. One way to do that, I think, is to focus one's entrepreneurial efforts on leveraging business models that do not depend on copyright: open source software development, for instance. That way, even if our startups get crushed, or acquired and corrupted, the basis is out there for others to pick up where we left off. This means not using licensing models that create a competitive advantage for the "owners" of the "intellectual property" that is produced, including copyleft licensing (because the copyleft terms do not apply to the "owner" or author), either not patenting technologies or (even better) granting universal license to use our patents, and building strong communities around our "products".
It's a nontraditional approach, but it's an approach that ensures your legacy as an innovator will survive the end of the business entity you use as a vehicle for innovation, or the end of the honesty of that entity if someone else achieves control over it.
