Copyright works just fine as is, that's why it hasn't been changed.
In the recent post in which Nilay explains why Vox and The Verge are opposed to SOPA, he ends by stating,
...we need to preserve the power of communities, like the Vox Media communities, by explicitly expanding fair use to encompass a wide range of legitimate uses that do not erode the market for the original works: commentary, criticism, parody, remix.
This doesn't make a to of sense to me, since protections for these sorts of works is already baked into copyright law, both in statutes and in the case law. It's asking the law to expand and encompass things that it already does.
Chapter 17, Section 107 describes fair use. IT essentially SAYS, that parody, critical, educational, and remixes are fair uses of original, protected, copyrighted works. Specifically, the statute even takes into account the effect the new work has on the original. That is, if the new work supplants the demand for the original, it is less likely to be considered a fair use (and even then it is not guaranteed to infringe).
US case law The Supreme Court has cemented the application of this law to parodic/remix works in the case of Campbell v. Acuff Rose, 510 US 569 (1994). In that case, a band (2LiveCre, lol) used the initial components of a Roy Orbisen song as part of a song used to parody the original. Think, also, about all of those weird Al and SNL parodies that have not been sued over. Parody and commentary and criticism are clearly and specifically protected in US law.
The one issue many proponents of copyright reform seem to pull out is sampling. There was a case (that escapes me) involving the Beastie Boys in which the court said (and has since been upheld) that sampling (taking and using the ACTUAL recording) is never allowed. There's an easy solution to this: play it yourself! Use garageband, or some cheap equivalent to play the same melody/beat/sound yourself and there is no claim.
Thus, I think that Nilay's claim (and one mirrored by many creative-content creators especially in the music business) that the law needs to be fixed is incorrect. I think he means that the enforcement of the law needs to be fixed. The DMCA, for example is really about the enforcement of existing copyright law. Little is in regards to actual new protections (the exception being for encryption schemes).
Take for example the DMCA safe harbor provision and DMCA takedown requests. The section is essentially designed to protect content HOSTS from liability for the actions of their users. In other words, YouTube will not be held liable for copyright infringing videos posted by its users if it plays nicely. That is, it accepts takedown requests from content owners and removes infringing content accordingly. This seems legitimate until you consider how YouTube covers it's ass: it does not consider any fair use claims, it does not actually look at any material claimed to be infringing, it just removes it, no questions asked. That way, when it finally does get sued by someone, it can tout this flawless record of positively responding to every single takedown request.
This means that even legitimate videos get taken down with no process. And since it is a private company, the 5th and 14th amendments do not apply.
SO my question (and translation of what I think Nilay may actually mean) is, how do you create a new enforcement scheme of the existing law that encompasses these fair uses such that:
A: The content creators have a mechanism for taking down legitimately infringing material
B: The pardists, commentors, critics and remixers have the ability to post legitimate fair use materials without risking takedowns or suits.