They made their band a business: they have to deal with the consequences. Using MGMT as an example of how "bad" record companies are is very disingenuous, they chose to sell out.
If technology renders something unnecessary, we should let the firms making the unnecessary product(s) disappear, rather than totally distorting markets, changing existing laws and reducing civil liberties to keep the markets-as-they-currently-exist around.
The only answer to that is to claim something more than "just a business" about making music or movies (or whatever "Intellectual Property" notion you want to push). At that point, you've departed from treating things legalistically. You have to start allowing for philosophical considerations.
Record labels provide a lot of value, they provide the funding to produce albums, to go on tours, they provide the marketing experience and reach to take a band from small to big. Labels don't just take a chunk and provide no value, otherwise why would anyone sign? Labels provide a lot of value: value that (apparently) nobody on the internet understands.
Justin Bieber is a great example, he was a dumb kid on Youtube singing songs and had a small fanbase, he could have continued alone to make songs and maybe sell them on Bandcamp and maybe make a few thousand $, instead he chose to sign with a label and today is worth hundreds of millions of dollars, if not more. He is a global brand. Would Justin Bieber be worth $xxx,xxx,xxx today if he stuck it alone? Has any independent musician ever done that before? The value of labels is clear.
People don't need labels now to build a following, that much is true, but that doesn't mean labels should not expect the same protections that other business types get. If a label has a product they should have reasonable expectations of control over that product, this includes making it illegal to steal that product.
I really don't follow music much, I have a tin ear, as they say. I merely see Music-production-as-big-business doing a lot of things (lobbying, propagandizing, maybe even comment trolling) that seem, well, authoritarian, totalitarian and not for the general good. Specific laws that promulgate what I see as a false-to-fact concept, "Intellectual Property" mostly have the backing of music and movie production companies, and pharmaceutical companies. Those companies appear to me, an outside observer, to be less than helpful to the general populace. If they need to drastically curtail civil liberties for success in the market, let the companies fail.
Technology has not rendered copyright unnecessary. Yes, it is easier to mass-infringe these days than in the past but you must remember that, not only has it been possible (and generally easy) to infringe upon copyright, but that that is the very reason why copyright exists in the first place.
Intellectual property is more than a business and it's silly to claim otherwise. To quote the US Constitution on the matter:
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries"
This is the clause that essentially says "People can copy the work of others so in order to encourage creation we will allow creators an exclusive monopoly for some time after which it will belong to the public."
The problem with copyright is not that the industry is trying to pretend that it's not easy to copy because that is really nothing new; the problem with copyright is that the idea of "limited Times" has gotten ridiculous but that is an entirely different conversation.
Or is your viewpoint more along the lines that you still want them to make this so-called unnecessary product, but due to your "philosophical considerations", you feel that it's okay to take a copy of the product without paying the asking price?
The recording companies are what come to my mind anyways... shrugs
Music creation is still an unsolved problem. Previously, financing of music creation was tied to distribution. Now that distribution is unnecessary, we need to rethink how society should promote not only creation of music, but of all intellectual capital.