The whole music discussion does seem a little bizarre, comparing hit groups from the late 60s/early 70s with underground and obscure groups today. You at least have to compare hits to hits for any fair comparison.
I think there is little question that the 67-73 period had an incredibly high quality of innovative music topping the charts. Today, there is a higher level of pop dreck, but there are also great innovators, not just on the fringes, but mainstream acts like the Fugees/Lauren Hill/Wyclef stream, post-punks like Green Day, hipsters like Beck, political artists like Chumbawumba, and folk-inspired groups like the Cowboy Junkies.
Actually, there is a similarity in periods in that the last few years in music has seen an incredible melding of styles, from punk and metal, soul and rap, world music and country -- all combining in new surprising combinations. The late 60s would see a similar melding of everything from the blues to country to jug music.
This is a decided relief from the rigid music categories of the 1980s when a station playing heavy metal would never play a rap-inspired song, while pop stations avoided anything "punk" or alternative like the plague. If there is a period of mainstream wasteland, it is the 1980s when radio was dominated by Europop, degenerate heavy metal that was a shadow of Led Zeppelin's magic, and soulless pop. Even after MTV broke its racist avoidance of black artists in the mid-80s, it still divided its day into slots for punks "London Calling", rap "Yo MTV Raps", heavy metal slots and so on, with VH-1 having country and other pop slots.
In some ways, the Run DMC-Aerosmith rap-heavy metal duet of "Walk this Way" would foreshadow the category breakdown that would usher in everything in the 1990s from Grunge to Rap-inspired pop.
The new multi-racial, multi-genre listening audience of today's high schoolers and college listeners is very real and pretty exciting. It came home to me a couple of years ago when I was in Boston for a visit at New Years, going to various "First Night" art events. At the end of the night, I ended up at a concert sponsored by a local Boston radio station. Remembering my time in Boston during the 1980s when you would never see mixed-race groups, here you had white and black teenagers bopping away together to hip-hop songs. A radical change that probably gave me more hope on the racial integration front than anything I'd seen in a long while.
Music may not set you free, but it still has power.
-- Nathan Newman