I haven't heard anyone articulate the problem better than PG. The analogy isn't perfect but it's sufficient. The point, Paul Graham says, is that in our history we've limited what we sell to what makes sense to sell.
Land used to make no sense to sell. Shit changes it now makes sense. Copies of music doesn't really make sense anymore either.
Hype (which is great) for example. Can he really tell his investors that people downloading it from TPB is no problem? In theory his thesis is fine, in reality not so much.
Clearly he is talking about copies of software too. It's changing from Adobe PS type software to a subscription cloud based software. You can still certainly make money with software but your not gonna make as much selling just copies of software.
Land used to make no sense to sell. Shit changes it now makes sense. Copies of music doesn't really make sense anymore either.