Robert Blumen at The Ludwig von Mises Institute wonders Why Do We Hate Modern Classical Music?
He doesn't answer the question, but concludes that after 100 years or so of it, the fact that it's a market failure should be an indiciation that it's time to move on.
However, there is of course an answer to the question. It's not answerable by economic theory, of cource, but by Darwinian theory. As Jonah Lehrer argues, the answer is that we have an evolved range of tastes for music. There are sounds we find beautiful, and sounds we do not. We can learn to like things we are unfamiliar with, but we cannot learn to like things we were not evolved to like.
So why keep making it? I surmise that there are those who want it made as a status symbol. The problem with the free market is that it makes all material status symbols available to the poorest among us after a while. And that "after a while" has sped up remarkably of late. So what indicates status? If the wealthy can find something that the average person doesn't even want, they can signal high status by declaring that, contrary to the hoi poloi, they do like it. Bring on the pickled sharks and 12-tone rows! So long as the free market undermines material status symbols, I suspect our evolved desire to indicate high status through symbols will drive the wannabe elites to embrace art works the average person distains. The funny thing is, though, that such behaviors may in fact have an undermining effect, as the average person isn't at all impressed by those wanting to show their high status embracing such works, but increasingly roll their eyes, or outright laugh at them. If that happens, where will the wealthy go for their status symbols? It's hard to say -- but you may rest assured that they will find them.