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So we're not really dealing with creating a more efficient market here with winners and losers. So it's not really a "better" method of distribution.

Since scalpers only deal with the price for the excess demand it actually is a good economic model.

Presumably, the promoter sets its price at a figure it determines will generate the most revenue and keep regular customers happy. If the promoter under prices its tickets, there is going to be excess demand. How this excess demand is treated is what scalping is all about. Even if the promoter was able to insure that say, no more than any individual could buy more than 2 tickets, some of those who did not get tickets will pay extra and some with tickets will decide the premium is worth it and will sell and pocket the profit.

Since there is a happy buyer and seller, why should this be illegal.

If some enterprising business person is willing to pay people to stand in line all night to purchase tickets for later resale, hasn't he performed a valuable service to those individuals who want tickets but do not want to stand in line all night?

Shouldn't he be entitled to a premium for his forsight, and risk?

Since there is a happy buyer and seller, why should this be illegal.

Not saying it should be illegal. Just that it does not conform to the terms of the original sale by the artist/promoters, and is therefore unethical if done only for profit with no intent on attendance.

Artists/promoters aren't necessarily looking for the highest price, that's why they limit ticket sales in all sorts of ways: local areas, ticket limits, no agencies, etc. Otherwise, the artist/promoters would auction the tickets themselves to the highest bidder.

Finally, as other players can not enter the market (only possible substitutes), there isn't any efficiency created, or what could be considered productive work achieved.

I wanted tickets to see Tool on December 1st here, and tried to win the local radio contest, but had my usual luck, and was prepared to bite the bullet and buy a couple of tickets. The tickets went on sale at noon on Friday. The show was sold out at 12:20pm.

It looks like I’ll just be sitting at home that Saturday, because I sure as shooting ain’t gonna pay more than $80 for that show.

The Scorps were probably better anyway...

If some enterprising business person is willing to pay people to stand in line all night to purchase tickets for later resale, hasn’t he performed a valuable service to those individuals who want tickets but do not want to stand in line all night?
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Again, this is gross oversimplification. The brokers are using software to push to the front of the virtual line, and pushing regular consumers to the back.