On the copyright issue: yes, infringement commences once the photos are distributed, but control can most easily be asserted ahead of time. While the points you raise, 2F/2F, are valid, why would you want to defy the wishes of other artists? If what you want to do is to use their images in some artistic way, as you describe (e.g., the Hershey wrappers), why not talk to them ahead of time and get their cooperation and permission instead? Put that shoe on your foot and walk around in it awhile. Would you want a photographer taking pictures of your pictures without your permission, or even any knowledge of his/her intent for those photos?
Copyrights protect artists -- all artists. When one artist or set of artists does battle with another, we all lose.
To play the put-yourself-in-their-shoes angle, you are asking the wrong person. I am a United Statesian, and not only that, but I actually believe in the basic gist of the supposed values on which this country was founded, and respect the law as a whole and the process it takes to arrive at it. In my mind, the main underlying idea to this place is that no one person's point of view should establish the system of law to which others are held. This means that what I personally want does not dictate what is right, and what is law. That has been determined by the public using the established democratic systems of government for over 200 years now. Is this method perfect? Far from it, but I respect it anyhow. I do not always follow every law as a photographer, but I respect the basic system, and when I transgress against it, I do so *within* the system, knowingly and prepared to face the consequences, NOT with the self-righteous belief that I am outside the system; that my personal situation and beliefs somehow make an exception for me.
If I put my "work" in public, I do so knowing that it can be photographed. If I think that it can't, then I am, quite simply, WRONG. If I don't want it photographed, my only course of action is to keep it out of the public eye. I can worry about copyright issues if they come up, in accordance with the law. That fact that "control can most easily be asserted ahead of time" is some of the most twisted logic I have ever heard. Does what is *most easy* determine ethics and the law? We do not live in a fascist nation (though we will be soon if this keeps up). I cannot legally assert preemptive action and attempted control over someone's ability to use various media in public. It is our FIRST additional liberty, for Christ's sake - BASIC stuff here. Doing so is ethically and legally a far worse crime than copyright infringement by far (which, as you noted, does not even exist until there is use, so there can be no accusation until there is use). I do not care if someone takes a picture of it within the law. I have more respect for the law than I do for myself, or for any other person; as it should be with us all, or we should find a new country.
Now, the real, and very simple, question has not been answered by anyone so far (as it never seems to be in these types of posts...): Was the event public or was it private? That is really the end of the story. If it was private, we know the rules and must abide by them or face the consequences...and, YES, the performers and venue can absolutely prohibit or place restrictions on recording. I am not arguing that at all...
I also hope that you have read my earlier comments to the OP. I think he should have felt lucky to be able to photograph at all, that he should not have responded as he did, and that is is also lucky that he was not made to leave the event. My argument with you is merely over your take on copyright concerns. I am basically on the side of the venue in this case, but when someone starts making up legal issues, they must be answered. It is essential to the maintenance of liberty and democracy in this country.
P.S. It was Al Hansen, not Allan Kaprow, who did the Hershey wrapper collages. I got confused because when I was growing up, my father and Allan Kaprow's son Anton were best friends. Hansen had given Kaprow one of the collages, which was always on Anton's wall. Growing up, I always assumed it was Kaprow's work until I learned otherwise. The crediting of the work to Kaprow still sticks in my mind, even though it is Hansen's.
