I agree that copyrights extend beyond a reasonable time frame, but that aside, they encourage competition rather than stifle it. Why look for a better solution to something if just anyone can now copy your work and produce it without incurring the costs associated with development or licensing?
I have to reject your point because the recognition of Copyright isn't to encourage competition, but instead to encourage original creation (i.e. progress) by securing a monopoly for the original author over the original work and by implication any derivation. But in the arts it's difficult to create without some derivation, and so monopoly on copyright must be limited in time else it will eventually work to prevent progress rather than encourage it. Furthermore legal precedent recognizes "fair use" because there forms of original work (e.g criticism) where in order to refer to another particular work it is necessary to replicate the original in some form, but not wholly.