You can criminalize commonplace activities from law-abiding people, but eventually, something has to give.
Well, yes and no. We need to be more specific here; in the eyes of copyright holders, these people aren’t law-abiding. And just because a large group of people does something presumed legal, doesn’t mean we should legalize it. Think of it this way: substitute “remixing copyrighted material for non-commercial purposes” with “theft” in the material sense. We wouldn’t want to legitimize theft altogether.
The challenge with the remix-culture is that it has no visible or noticeable regard for copyright at all, as far as lawmakers are concerned. New laws in this area should make very clear distinctions between commercial and non-commercial use, as well as non-commercial use with commercial gain as a side-effect, e.g. if a non-commercial video goes viral, the creator may get commercial offerings—jobs, sponsorships, etc.—as a result thereof. In that circumstance, should the original artists whose work was remixed be rewarded now?
What’s definitely true is that remixing is not going to stop, and won’t be legislated away either. Best we can do is work towards a future where the majority of artists themselves don’t feel unfairly taken advantage of.