What it comes down to is, as Gruber so eloquently put it, that “the distinction between ringtones and songs is an artificial marketing construct.” The entire ringtone market is based on artificial restrictions—not physical ones, not technological ones, not even logical ones—put in place to create a market where one would otherwise not exist.It's this last point that is particularly important for our purposes. The idea of creating a market where one doesn't exist is the foundation of entrepreneurialism. It's how the computer and cell phone industry got started. It's how people are wearing jeans as a result of the Westward Expansion. It's how Las Vegas was founded in the middle of the desert.
Between Dan Frakes and John Gruber, we have a great summary of the current mess that is the ringtone business, particularly as it is addressed by Apple: