There is no such thing as a nonsociological answer to What Is Art. Art is what people self-identified as artists do when they are doing something identified as making art, at least if they can get enough other artists and interested people -- curators, collectors, critics, art historians -- to agree. Some people confuse the question Is It Art with Is It Good, which is of course a different question. Good Art is what respected people who can talk in ways regarded by the community as an intelligent and informed way about the stuff that artists make like.
What makes Art Good is whether it comes up to the variable and changing standards adopted by these groups. The standards themselves are always up for grabs.
Cultured people, so called, are people who have reasonable familiarity with several sets of standards, some knowledge of how they are applied, and some awareness of and ability to talk about central exemplars of what various art communities have considered to be especially good or important.
(This is straight, unadulterated pragmatism.)
[WS:] While I fully agree with your statements above, I also think they are somewhat tangential to the main theme of the quoted article. That theme was the 'anything goes" attitude and the conspicuous consumption of anything that goes is antithetical to any concept of art, because it obliterates its context specificity. What defines art, any art, is its placement in a particular context, be it social, natural, spatial or what not. Outside that context, the art ceases to be art - and that fact is an essential definition of what art is. Duchamp's installations of everyday commercial objects make convey this message very clearly. In other words, X is art only because it is not-art, if placed in a different context.
According to my reading of the article in question, that fundamental feature of art is being destroyed by its commoditization, or rather mass-marketization, and the flippant 'anything goes' attitude such mass-marketization fosters. The main harm is that mass-marketization and anything goes attitude strip art from its environment that makes it what it is and turns it into a one-size-fits-all commercial hype, or a PowerPoint presentation if you will.
The author was quite specific that his intention is not to pronounce what "good" or "bad" art is, especially to set "high culture" against "low culture." AFAIR, he explicitly said that each of these genres has its own merits within their proper contexts. His point was to oppose the obliteration of that context by practices that he observed.
This, BTW is also my objection against the nihilism of the pomo culture. As I said to Ravi on another occasion, I do not see pomo "deconstructionism" as a bona fide attempt to dismantle authorities and pieties, but a quite dishonest attempt of shameless self promotion by attacking established practices or beliefs - which in my book is yet another form of charlatanism and demagoguery.
PS. A few years ago I published (in the _International Journal of Cultural Policy_ vol. 5, issue 1 http://www.tandf.co.uk/journals/archive/gcul-con.asp) a critique of the book by Tyler Cowen _In Praise of Commercial Culture_ which as the title suggests, praises the free-market, laissez faire approach to the arts. Unfortunately, the piece is not available on line, but I can send a text version of the manuscript to those who are interested.)
Wojtek