See, I've heard this way too much. And, thankfully, just as so many other artists have felt in the past when faced with such silliness from the self-interested, if it's actually true then I'm happy to have been a part of it. :) Free music doesn't undermine anything you do, unless it is just as good, or better, than what you are doing.
Meanwhile, in my own back yard, there's music being made all the time, with no shortage of parties or venues playing it, where the artists give the music away for free over the net, on CD, etc. The scene won't disappear. Only you will if you choose to.we aren't all as rich as radiohead you know.
if some of us didn't get stuck in and treat our music making as a job 24/7 no matter how big or small or rich or poor we are, there would be no dance music scene to speak of and thats the bottom line.