You've ignored the fact that discovery is now a new service component that really didn't exist before. We can tag music and artists and we can automatically discover related music and artists very easily. All the major services do this. Think of an expanded and federated (all the way back to the artist) open source version of this.
There's no reason to think that the previous model somehow produced the most efficient way of "determining who people listen to." It was almost certainly suboptimal. It's no surprise then that this suboptimal model was more or less copied onto the internet and all new players bought out so no new model could be revealed.
The lack of available artistry and market for it extends through multiple levels, and in this case, right into the software stack that _should_ exist for artists to self publish and for listeners to automatically discover.