I can only speak for original music, but here are some harsh realities that I think are getting glazed over:
Most live music venue owners/managers/promoters are not in it for the money (stay with me here). Original live music is a great way to put your business in jeapardy, NOT a great way to make money. I've considered opening a bar with live music and have run through a hundred best-case-senario numbers and they all suck -- hell, I'd be better off as a band member than a startup owner! These owners are typically people who have sunk a couple hundred thousand dollars and quit their day-jobs to involve themselves in a venture that has limited prospect of return. They're enthusiasts who often can't understand why bands can't understand that they're providing a space and backline; they just want a little return on their dream.
If they're not in it for the money, why are they: cheap, jerks, taking all my gig money, etc? Because it's the only way to keep the venue open and they sit through dozens of horrible bands with horrible "rockstar" attitudes each week.
Why don't they advertise more? Put some ads on the radio, cover an area with fliers, etc? Because that costs money and carries no return in most markets. Their business is filled with getting better rates from distributers, dealing with inspectors, putting new drivers in the cab someone blew out last night, etc. Your business is the band. If you don't do your own promotion, that's like the owner not cleaning up, stocking the bar, fixing the equipment, etc.
Why don't they return my phone calls? Because you're one of 100 bands that dropped something off that week and they think that: you suck, won't draw, aren't right for their venue, haven't heard of you, never listened to it because the other 99 jewelcases looked better, don't book bands with physical press kits and you never bothered to find that out, go on referal only, heard that you complain about how they run their business, etc.
To be fair, I get that some clubs are run fools who don't know how run a business (any business), and expect bands to eat their $#!% and make them money. To be fair, I've never played or heard of a venue like that that remained open wihtin 5 years of running their business in such a way (of course, a lot of them foolishly signed 5 yr leases and screwed themselves the day they put ink to paper).
My band makes money most nights. We generally stay in the black even with gas, hotels, downtime, etc. We're not going to get rich as an unsigned act playing bars and clubs, so we're not trying to. We also don't have much trouble getting guarantees because: we keep our rates reasonable, we understand that some nights pay better than others, some venues pay better than others, that there's more value in a relationship with the club than and extra $25-50 per member, do lots of cost-effective web-based promotion, have built a resume that opens doors, and are good to the owners. As a side note, the best pay we get is in our hometown at a small bar with no guarantee: we get a % of the door & 0.00% of the bar. Every town has a few bands like this and they are competing for the better slots and venues.
Is it fair? Who promised anyone fair? Being a band is like being a sales person: it's commission based and those who survive stay ahead of the curve, do their own marketing, understand building/retaining relationships, see the long game, and those at the top make a handsome sum and everyone else is struggling or quitting.
Edit: I read that back and it sounds horribly jaded, but I do believe that that's how it really is. It's a tough road to just get your head above water. It's important that you love the experience of being in a band if that's what you're going to do.