Comment by AnthonyMouse

The argument is more along the lines of, negotiating with millions of individuals each over a single copy of a work would cause the transaction costs to exceed the payments, and that kind of efficiency loss is the sort of thing fair use exists to prevent. It's not socially beneficial for the law to require you to create $2 in deadweight loss in order to transfer $1, and the cost to the author of not selling a single additional copy is not the thing they were really objecting to.