This is the type of thing that needs to be brought out into the open. The copyright pigs don't have enough sense to realize that, if someone does a cover of their song and does not charge a single penny for it, it's not hurting their sales. In fact, it might encourage people to go out and buy the original song. I have my own ideas on how to revise these 'rules'.
1. If you did not play any active part in the making of the item (song, piece of art, book, etc), and if you are not a direct descendant of the person who did make the item, and if the copyright to the item was not given to you by the person originally responsible for the item or one of that person's descendants, then you are not allowed to claim, buy or own copyright of that item under any other conditions.
2. If it no longer possible to buy a new copy of a CD or movie, and if the only way to obtain a copy is through an auction, library or similar source, and there are no announced plans to re-issue the item, then the copyright becomes null and void.
3. Those who claim to own a copyright to a CD/certain items of music must demonstrate beyond the shadow of any doubt that anyone doing their version of a song that is 'copyrighted' has definitely hurt the sales of the original song/songs. If they fail to do so, they will pay the alleged violator $10,000. The person doing the cover of a song, however, must not sell his or her version of the song to anyone. The cover version cannot appear on a CD, a DVD, or in any other format that requires money being paid to obtain the cover of the song.
The reason so often given for closing down songs on YouTube is that it is violating the 'intellectual property' of someone else. Ideas and knowledge in general is meant to be shared as long as it is shared freely. Certainly if someone does a duplicate of a song (using songs as an example) and then tries to make money from it that is wrong, clearly. But if someone is sharing their love for someone else's creation by doing a cover of their song, that person is not showing greed (since they make not a penny from their cover), but their appreciation for the 'intellectual' creation of someone else.
The major force behind all this is the greed of the record companies that are the only ones to really profit, and they do so from the hard work of others, not from anything 'intellectual' they have added on their own (perish the thought that such execs might have a thought.) It's an issue of common sense, really, something that is totally missing from the 'intellectual property infringement' issue (and largely missing in society at large anyhow.)