You may be right in that AAA-titles would decrease in numbers, but their creation could still be financed like how Dwarf Fortress is financed (and how the majority of non-game software is financed).
How exactly? Advertising?
And regarding the indie-scene: With more projects started and more people working on stuff and more knowledge freely available, more games would reach a finished, polished state. And without the feel of "well, those pro-game-makers will do the proper stuff" there would be a bigger focus on polishing the free stuff.
So now not only do the indie devs not get any money they have to put even more time and effort into the game because the mainstream industry has collapsed?
Also, I think there are tens of thousands of people who would be willing to support their favourite game makers. And with more people playing and making games there would be a much bigger support base. Additionally, with more people realizing that their contribution (of money, among other things) really matters, even more would be willing to contribute. (Just look at the support Wikipedia gets.)
Wait, so they are making money from it. I thought the point was they didn't. Are you saying everything should be donation based?
I'm not sure if i'm missing the point you're trying to make, or you're just living a naively optimistic cloud cuckoo land.