Okay. Let's take these one by one.
1. Members of Metallica are stating that they have to tour constantly to make up for lost royalties.
We really don't even know what this means. I'm not a Metallica fan, but is it possible that their last few albums really aren't up to snuff and that they're fallen off of the "auto-buy list" for many of their fans? This, in addition to the general decline in record sales could help explain their issue. In other words, if they were to produce one of the most kick-ass records of their career, would they need to be selling their priceless works of art?
2. Most any rock band that can't sell normal concert tickets are being packaged into cruises, 2nd rate casinos, and festival third stages.
Is this a sign of decline, or a new marketing paradigm? Throughout rock, bands have come and gone. Now, some of the "hangers-on" have a way to continue to make money while playing for their fans. Package tours have been around forever.
3. Geoff Tate has allegedly tried to murder his band in South America, and is confirmed to have told an Oklahoma crowd that they suck. The other QR band members now have a new band, but are STILL booked as QR through 2012.
I don't see how this is relevant to the discussion at all.
4. Eddie Kramer, the world famous producer/engineer of everyone from Jimi Hendrix to Led Zeppelin is selling pictures and swag at the John Bonham birthday bash gig to earn a little extra cash.
Again, I don't know enough about Mr. Kramer, but has he kept up with the times? Is he still as relevant and fresh as he was when he was working with Hendrix and Zeppelin? I mean, that was 35 years ago, at least.
5. My teenage daughter's favorite band is called One Direction and their biggest hit is a ripoff of an old Sheena Easton 80s hit with horrible lyrics and auto tuned vocals throughout.
Oh no! Your teenage daughter likes music that is created to appeal to....teenage daughters?!!!! The horror!
So, is it just me or is the whole rock and roll thing in the toilet at this point?
If it's not obvious by now, my answer is no. Like the entire music industry, it's just changing - it's in a state of flux. And if you really feel this way, the examples given in the original post don't make a strong argument. Technology has drastically changed how music is created, produced, marketed, distributed, and listened to. Those who can keep up with the changes will survive, the rest will take cruises with their fans.