The reason it was a bad business decision is not related to the value of anything exchanged materially, or any moral argument.
It was a bad business decision precisely because it harmed her brand and reputation. Whether it "should have" harmed her brand is immaterial. Whether "the complainers" should have thought something different is immaterial. It happened, and she had to make a business decision.
Tim, Mike, I love this blog, but you guys really buried the lede on this one! This topic is right up your alley.
The real story in this is not about asking for volunteers for a for-profit venture. It's not about greed or generosity. It's not about morals per se. It's certainly not about "hitting it big".
It's about business. Amanda Palmer made a bad business decision, and had to correct it before it was too late. Making 12x her goal, over $1M, all eyes were on her, and she acted like every professional musician's nightmare and that generated bad press. Sure, morally or legally she did nothing wrong. Maybe those musicians were overreacting, maybe not. That's not the point and blaming them isn't the point either.
The point is that she harmed her personal brand and her musical reputation, at a time when many people were watching. Making good on this is a big step in salvaging that reputation and brand.
This is the same reason even very small software companies donate time and money to open source initiatives. This is why extras get paid for appearing even in most non-union movies. It's not about morals, or greed, or generosity, or helping others hit it big. It's just good business.
Since part of the patent deal is that you open up the knowledge, why not find a fair way to put the patent claims up for public comment for a period of time, so the open source community can judge obviousness/find prior art?
This still does not seem in line with the intended purpose of copyright.
"Of course, it's not clear why it was even explored late last week as a possibility if the administration is so against the idea."
I would rather most government institutions evaluate ideas on their merits, rather then dismissing them based on a single belief. The investigation validates the dismissal.
"For instance, if exclusives are banned, would manufacturers be forced to build variants of a handset for any operator's network?"
This is an extreme assumption. There is an obvious middle ground where exclusives are banned, and handset makers simply must choose which networks to build for without shopping their handsets around in search of exclusives.
The main benefit of recent keynotes may have indeed been a combination of the physical presence and online presence. Bloggers big and small attending the event have liveblogged the keynote, letting everyone worldwide see what Jobs was saying as he was saying it.
Personal anecdotal evidence (from a few friends) suggests even people who are not that interested in tech news find this fun and even interesting, and read up on what goes on. I bet others found the same thing.
I really wouldn't be surprised if these huge trade shows to continue to find a purpose, but it will be as part of something larger.