I recall having a discussion regarding this with Greg Sandow some time ago on his blog. The whole issue of “being a musician” and the general lack of opportunities, regardless of whether the climate was better in the past or just as problematic in its own way, boils down (for me at least) to what exactly does it mean to be a musician?
I mean, obviously this is supposed to mean something along the lines of being someone who enjoys playing music (or to follow along your lines–someone who has to play music).
But sometimes that seems to be at odds with the whole idea of making money, or at least making a comfortable living doing music. I’m almost reading your post as an apology for being one of those folks who just don’t have any choice but to be a musician. Not that I necessarily disagree, it’s just that sometimes the rationale behind assuming that role of musician (at least here in the states) means not worrying about whether or not you can make a living doing it–to the point that it’s almost seen as a bad thing to do so.
And you hear this from pop musicians as well, so it’s not something only classical musicians (not that all feel this way) do–you know, hearing things like “I’m doing it for art’s sake” or “cover bands are only in it for the money, but musicians making original music are doing it for themselves”–things like that.
I find this to be a particularly Western phenomenon and can be traced at least as far back as the romantic bohemian idealism that also has that other trope of the “starving artist”–but it’s not as prevalent a viewpoint (though that is starting to change with Westernization) of other cultures. And not that other cultures haven’t had a similar lack of respect for [certain groups of] musicians. The Rom of Eastern Europe and Rembitika of Greece come to mind immediately.
I guess my point is–and it was something I was implicitly stating in my recent blog post–there are far more opportunities out there than most of us not-so-entrepreneurially-inclined-folk realize. It’s just up to us to find them and, well, “exploit” them.
I guess that’s why I blog so much about underserved audiences–because it’s not that there aren’t enough musicians out there to play music–in face, there are probably too many as you and everyone else is stating. But the demand for music from these audiences should be more than enough to start filling some plates (pun intended). Hell, I still have to turn down nearly as many shows as I accept–have been doing that for the past few years despite the so-called recession and some folks’ stating (e.g. Greg Sandow) that even freelance musicians are having a hard time finding work (which makes me wonder what freelancers in New York are doing to get gigs).
But going back to what I said on Greg’s blog (and I’m too lazy to go find the post) it had very much to do with how we define ourselves as musicians. I think I gave an example to the effect of, well–if I view myself (my role) as being that of an orchestral cellist (or even classical cellist) then sure, there are diminishing opportunities for me in this depressed market. On the other hand, if I view myself as a musician, who just happens to be able to play the cello (amongst other instruments including my voice) well, there’s a whole world of opportunities to be had.
I guess I shouldn’t complain too much–as long as cellists and classically trained musicians accept a narrow role of what they mean by being a musician, that just means more work for me! 
Obviously this is a simplified statement of my position and there are other considerations to be included in the discussion. Talk about younger and more adventurous musicians finding work despite the environment must be balanced against the idea of having some measure of security with regards to benefits and pensions that musicians in the orthodox institutions have come to expect and be concerned about.
As the discussions about the Classical Music environment in the US gets more nuanced now that we’ve gotten used to the idea that Orchestras just might not be as long-lasting an institution we thought they would (or should be) given the recent bankruptcies and closures of American Orchestras I’m curious to see how many folks will start to question some of the fundamental assumptions of what seems to be a Eurocentric view (either con or pro) on the preservation of arts.