Excellent post bigfatbass.
You can get enjoyment or feed your creative impulses by writing and playing your own music.
You can enjoyment and put your own 'spin' on hit songs.
It's still music. There are many aspects to it of course. Why do people do covers anyway? Most likely because they like the song - or would like to reinterpret the song.
Foo Fighters do a great cover of an Arcade Fire song - you think Arcade Fire's publicist is furious?
As far as I can recall from my ASCAP member book - the only $$ I'll see is if the CD I recorded is played on a commercial radio station, a public venue or on television. In order to play a mix of songs over the PA at a club, one would need a license for the original works to be played.
A cover band in a bar? You think Commitments submitted their song list???
The whole copyright argument here is sort of moot. I mean, for one - people know it's not YOUR song and sometimes you announce here's a tune by "artist" - you're not claiming to have written it. You're performing it, but it's not the exact replica of the original recording.
Cover bands get paid for their work. And a lot of them do a damn good job too. But seriously, you're going to think about charging a licensing fee to a band that makes $300 for a club gig? Seriously? Morals and laws. Two different animals.
Seems like a bit of the 'original music only' insecurities are creeping into this thread. I've been there, done that. And it's great. I take pride in my originals, most of them are crap, but I wrote them, and there's a certain artistic satisfaction gained.
I play because I enjoy music. Doesn't matter whether it's mine or someone else's songs - but really, what a silly thread.