I don't let my students cite wikipedia but I tell them to start there and I frequently use it in class and let them use it in class (I'm a part-time lecturer in a UK university). The reason I don't let them cite from it is not because it's wrong (I've only very rarely come across this problem), but because its author-bias is obfuscated, you don't know who's written what. Academic knowledge is highly dependent on knowing the author bias and being able to show a trail of authors who are 'respectable'.
I tell students to use wikipedia but find and cite the original sources as wikipedia is just an information hub, not research in itself (note the "original research" warnings on many wikipedia pages)
As for the lack of "brand/name recognition" making it impossible to sell merchandise, that's true. But the RIAA seems to be implicitly stating that the only way to get brand/name recognition is through a big RIAA label.
This is the crux of the point, and their real worry.
The recording industry (like any other middleman) sells itself as being crucial to success in that area of business, and its business entirely depends on the creators and consumers seeing it as essential. Their old business model is a control model of "we will tell you what is good, we will tell you what to buy". They're used to having complete control over what can be sold and by whom, that's what's changing. Without being the sole controllers of "what you can buy", they start to become less relevant, and ultimately become much smaller players, because the space expanded around them. They're desperately trying to reverse that expansion by whatever means possible.