I'm not here to defend publishers or the insane current copyright terms. However, in the traditional model of publishing, publishers subsidize production of new books from unproven authors--through book advances, copyediting services, and printing and distribution costs--via the money they make on the few successful and very few ultra-successful books.

If you take away copyright, you reduce the revenue of publishers, which reduces the number of unproven authors they can take chances on. (They're not very good at picking winners from the pool of new author manuscripts, not nearly as good as "agents" like to think they are, but that doesn't matter; they still wouldn't be able to take as many chances.)