As said, I consider copyright to be an imperfect mechanism, and strongly feel that even if copyright is considered the best compromise for the time being, it should always be at the back of our minds that there may be a better way that we haven't realised yet.
The problem I would hold with your point 2 is that commercial exploitation isn't what makes the removing of a freedom acceptable. It's the enrichment of the public domain that makes such commercial exploitation acceptable. This does still leave the question of whether allowing such commercial exploitation does enrich the public domain enough to justify itself, but that's more of a question of weighing up how much enrichment is worth how much freedom.
There's also another aspect with certain arts that I've been considering recently, and while it's not copyright itself, it should be considered whilst considering the effects of copyright (or any replacement). Certain art types can act as memes or drugs. An example of this would be how certain types of music get stuck in your head. Is it really such a good idea to allow the "infection" of people with a musical track (say by radio), and then have a law saying that to get your next fix you only have the choice of a single supplier, and that supplier gets to set the costs regardless?
"None are more hopelessly enslaved than those who falsely believe they are free." - Johann Wolfgang von Goethe