This is the same problem that any unlimited service has to deal with. Why does a user who downloads 10GB of data per month on their cable modem have to pay the same price as a user who downloads 300GB? They're subsidizing his usage! Why should I have to pay the same price as everyone else for Netflix when I really only ever watch House of Cards?

The reason Spotify specifically works this way is because any other reimbursement model is untenable in the streaming world. Rev share works "off the top" because the overhead of managing reimbursement (specifically the audit overhead) at the subscriber level would wipe away too much margin. Pandora had an overly complicated revenue sharing scheme and it nearly bankrupted the company until they moved to a model closer to Spotify's.

But more specifically, revenue share works this way because that's how it's defined in the contracts that both the major label and the indie label signed. If the indie labels thought it was a terrible idea, they wouldn't have signed it. Most indie artists anymore simply expect to make next to nothing on distribution and playback of their music: they make their money on the live shows.