[quoting Alessi's paper] On the other hand is the equally reasonable point of view that nobody really owns knowledge and society will be better off if we all share it. Publishers... contend that they own knowledge and want to charge all that the market can bear...
While some publishers may contend they own knowledge, that is not and has never been a part of copyright law. Copyright law protects the actual expression, not the information content, of a publication.
This is a crucial difference. If knowledge were copyrightable, I could right a book on, say, Newtonian Physics. Then, anyone else wanting to write on that topic would have to get my permission, since the knowledge would be copyrighted by me.
This is obviously not the case. What is copyrighted in my hypothetical book are the actual words, the expression I wrote to describe Newtonian Physics. No one else could come along and copy my words and sell them for a profit.
To my mind, the compromise that Steve asks for between a publisher's wish to control his or her publication and education's right to fair use already exists.
On a related topic, the suggestion for Clearinghouses to provide copies of articles or publications to people who are willing to pay for them already exists today. They are called publishers.