It does seem more like a hissy fit than anything else. He doesn't like how the system works. He's tried fighting it, but keeps losing. So he quits making music altogether. Yeah, that'll show 'em.
I think it's important to note that this has absolutely nothing to do with illegal downloading, which is a refreshing change, since it seems like that's all you hear about when there's some kind of gripe about the music industry. It's not really even about compensation to artists from labels, although it is related. It's about how Fripp feels that he and King Crimson aren't being properly protected with regards to rights to the music. The Kanye West situation is a great example. I've never listened to the guy's work, but I've seen enough of him in the media to know that he's a dick, and it doesn't surprise me at all that he'd sample a song and offer no compensation to the original artist. Rappers have been doing that for 20 or 30 years now, and it's not going to change.
But... because it's not going to change, I don't really see the point in fighting it, certainly not quitting music altogether to devote all of one's time to fighting a fight he can't possibly win. Shouting at clouds, tilting at windmills, etc. But hey, if that's what he thinks he should be spending his time doing, then that's his deal. He's always been very, very eccentric.