If there are that many restrictions it sounds more like the industry folks are just trying to show that they 'get it' without actually giving anything up.
Copying and pasting someone elses words directly is one thing, but if someone comes up with a great idea for a novel and implements it poorly, why shouldn't someone with more skill have the opportunity to improve on it?
It's natural for there to be a split between casual listeners and die hard fans of an artist. Pay what you want allows the die hard fans to pay for the value that they feel they are getting - which goes well beyond the piece of merch they are purchasing - and allows casual listeners to pay a price that is more in line with how they will actually use the product. If they can choose their own price tag, more of these casual listeners will choose to buy the stuff when they may not have otherwise, and each one now has the potential to become more invested in the band. When it works, everybody wins.
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restrictions
If there are that many restrictions it sounds more like the industry folks are just trying to show that they 'get it' without actually giving anything up.