2. It's negligible I think but if the plane is packed other passengers may have to check their bags at the gate because there isn't enough room left in the overhead after the musician stows his overly large and awkward shaped carry-on. Thus they pay in time lost after the plane lands and inconvenience of not being able to get into their carry-on during flight.
Mainly though I think the OP is just lashing out because it's sounds unfair that one person can stow an up to 165 lb, overly large piece of luggage simply because it's a musical instrument.