I think the plausibility…
I think the plausibility of Volokh’s counter-example depends on the fact that it is clearly unjust to steal stuff from a store. Volokh adds a bunch of consequentialist worries (fewer people will own stores, etc.), but this is just hocus-pocus: the reason that government intervention is uncontroversially justified here is because property are uncontroversially at stake.
Now, if the anti-IP argument were just, “There are other business models available that free copying wouldn’t make unprofitable, so therefore the government shouldn’t prohibit free copying,” then it would of course beg the question in a rather crass way, and Volokh’s counter-argument would demonstrate that. But I’ve never heard the argument that Volokh makes used in that way. Rather, the dialectical context of the argument is always a response to protectionist arguments in favor of IP restrictions: “If we don’t have IP, then how ever will the movies get made / the musicians get paid / the drug research get done / etc.?” Answer: try a new business model; your broken business model is not my problem. This is a perfectly legitimate consequentialist response to the attempt at a consequentialist argument in favor of IP restrictions; it doesn’t address the justice of free copying, but that’s because it’s responding to an argument that explicitly disregarded questions of legitimate property rights in favor of a plea for protectionism.
Taken from the standpoint of justice, Volokh’s response here puts the argumentative cart before the argumentative horse.
And insofar as this and other points are intended solely as consequentialist replies to the argument, and not as appeals to justice, the entire argument depends on the presupposition that socialist calculation of the “right” levels of drug research, songs, movies, etc. is possible. Which it isn’t.