There is an analogy to be made with the realm of photography.
There are lots of sites where people post their photographs and holiday snaps and so on, and you can view and download them for free.
But professional photographers only put up small, lo-res versions. Their full size prints and images are only available for sale.
A lot of people stringing samples together and making some music in their spare time are happy to just put it out there for free.
You won't see, for example, Steve Roach doing that. He's a professional musician who puts a LOT of time and work into his music. He expects to be paid for that work just as people do in their own types of daily 9-5pm jobs.
Yep, I do think all the free stuff dilutes the pool and can divert attention from the best in a genre.
When stuff is free or cheap it will attract an audience on that basis alone, rather than on quality. Its like people attracted to fast food because its cheap and easy to obtain.
Free stuff, when it becomes the norm, leads people to think it should ALL be free. Which leads to file sharing and mindless posting of artist's works as though its some amorphous unattached product and not a work of labour that took time and skill. It's like thinking all paintings, photographs, and other works done by artists should be offered for free (or pretty much anything made by individuals for that matter). Which is clearly not the case.
That's my current state of mind on this