File-sharing, in its prototypical form, was tape-trading. People would buy records or audiotapes and dub them, then swap them with others. Similarly, people would buy videotapes and dub and swap them. Television shows could also be traded. With the advent of CDs and CD-ROMs, the process continued. (I've done all these things, incidentally; so, RIAA, come get me!) File-sharing takes out the hardware, and allows direct transfer of data, but the structure is basically the same: person A has some copyrighted material, A makes a copy, A swaps the copy with B for something B has copied (or, simply gives B the copy).
So, really, if the RIAA is objecting to file-sharing, they have to object to tape-trading and all the other at best quasi-legal ways the fair use provision of copyright has actually been interpreted by the citizenry. That is, tape-trading was never clearly legal. Taping something off the television and sending a copy to a friend was never clearly legal. But, everyone has done it. Even if it wasn't legal as a matter of common law, it was legal as a matter of custom. Thus, file-sharing is nothing more than an extension of this principle. I believe (I have no evidence for it, but it seems reasonable) that the reason the RIAA is objecting so strenuously to file-sharing rather than tape-trading is that the former is done in tremendous volume in comparison to the latter. And I believe that the reason that consumers are objecting so strenuously to the RIAA's actions is that they see file-sharing and tape-trading are really two instances of the same practice, and they believe the latter is acceptable. (Thus, by transitivity, the former is as well.)
There's the source of the conflict, then: the RIAA sees that they are losing control of their copyrighted material, and consumers see that they are extending a practice that they've been engaging in for decades. The only way to solve it, really, is legislatively. A piecemeal common-law approach will yield, very probably, a set of decisions that favour those with the better lawyers. Shockingly, this will probably be the RIAA, as they can afford them. The current situation is untenable: two social groups will continue to butt heads and there will be real damage done, both to the corporations and the consumers. Legislation is the only other option. But, which way should the legislation go?
I tend to think that copyright is only extended in order to protect the right of an author to control and profit from his work. And the reason this right should be protected is that it is of greatest benefit to society to do so. For, if an author had no guarantees that his work would lead to renumeration for his efforts, why would he expend the effort in the first place? To be sure, some will do so because they feel compelled to, but I think most need to know that there will be at least some reward. If that's the case, though, then there need to be some revisions to copyright. First, if an author does not wish to profit from his work, then he loses his copyright. That is, you have the right to collect reward due given your efforts, but you can waive the reward -- and, in doing so, waive the right. Second, the reward that can be collected needs to be proportional to the effort that has been expended: profit cannot be unlimited, for this then disadvantages smaller authors in favour of larger (corporate) authors, when both are really exercising exactly the same right for exactly the same reason. Once the reward has been collected, the copyright lapses. If we apply these principles to file-sharing, we can see that most file-sharing is done of content on which copyright should have lapsed, as the requisite reward has been collected.
The point I'm making, ultimately, is that copyright was never supposed to be a license to print money indefinitely. It was supposed to give authors a chance to recoup their costs, and make a little profit, from their work. The balance needs to swing back towards the benefit of society at large, to have these creative works freely available, and away from the benefit of large corporations, to have these creative works controlled in order to make as much money as possible.