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> In 2013 why does capitalism and technology allow this to occur

I'd ask why music is sold at all when people will freely distribute it for you, and marginal costs are gone.

The answer to both cases, though, is legislation. Tons of law around recording, labels, etc that make it even if Apple wanted to be kind and play nice it is probably a legal morass to let anyone sell music next to labels.

Though the more likely case is that the middleman exist because they are powerful. Apple couldn't have launched itunes and had the success they did by trying to ignore labels - when all the popular bands are on labels, and new musicians think they need a label to be successful, Apple has to play ball with that mindset.

And mindsets change slowly. Expectations will evolve much slower than technology. It is the same reason apps took 15 years past the launch of the Internet to come to fruition, because moving past pieces of plastic in ones hand took some time.

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