Why does the content mouse terrify the technology elephant?

One of the things that baffles me is why the relatively puny copyright industries (movies, music, publishing) seem to terrify the massive computing and telecoms industries. Thanks, then, to Bill Thompson for pointing me to this post. Excerpt:

The total cost of Peter Jackson’s King Kong was somewhere north of US$200 million. That’s quite a bit, but such big-budget blockbusters are rare, and you can make and market a Hollywood movie for well under half that figure. Indeed, Brokeback Mountain had a production budget of only US$14 million.

In the tech industry, the price of a new fab is currently around US$5 billion, a price that puts such facilities out of reach for all but the biggest players like Intel and IBM. Still, that’s 25 King Kongs, or over 350 Brokeback Mountains, or 1,000 five million dollar episodes of a big-budget HBO series like Rome or The Sopranos. My point is that, for even just half the price of a single 65nm fab, the tech industry could buy a few small studios and just start throwing tons of free content at the world. Or, for the full price of a fab, they could fund almost a decade worth of low- and medium-budget content to give away as an inducement for people to buy hardware.

Intel, IBM, and other tech companies with large investments in Linux know full well that you can sell a lot of hardware by giving away the software. Why not give away the content too? How many dollars worth of media center, home networking, and home network attached storage hardware could you sell if consumers knew that there were terabytes of free, unencumbered, high-definition, processor-intensive, storage-hungry, bandwidth burning, digital content awaiting them on the Internet—content that they could copy, share, and shuffle around among as many newly purchased media devices as they like?