"Karaoke at your friendly neighborhood bar. Taking your girl out for a spin on the dance floor at your friendly neigborhood bar. Jam night at your friendly neighborhood bar"
None of these are things we are entitled to, nor are they rights in any understood sense. It's not a shakedown, it's called paying for what you are using to bring in the customers. You are not entitled to having a profitable bar on every corner.
It is hard to believe yall musicians really want to put thousands and thousands of bars out of the live music business. But like you said, there is no laws saying bars need to be profitable and thier is no law saying they have to hire bands ether. We will think of something else to entertain our customers. Like, wet t's, on line games, pool/dart tournaments, gambling, or whatever. Live music is not the only game in town.