The baseline argument for intellectual property is generally agreed to be the remedy of the public goods problem. Because ideas cost more to create than to copy, unregulated markets are thought to be incapable of sufficiently rewarding innovation. Intellectual property chooses property rights to subsidize this market failure, but there is no intrinsic reason it must choose this regime (leaving aside the moral rights issue). We could somehow subsidize these activities in different ways, but we choose property because it is thought to be the best means of achieving the given end.
While arguments supporting fair use are often confusing and, at times, contradictory, its basic structure is (or ought to be) the same: it’s a subsidy for good that the market would otherwise not sufficiently provide. Because intellectual property chooses a property regime (which has many pragmatic advantages), it creates a new market failure. This failure emerges in two respects: first, the property regime makes it practical impossible to acquire permission/licensing in certain situations, and second, it disables many forms of creation we otherwise desire. The first problem is contingent and the second is not. That is, changes in technology often mitigate the permission/licensing problem (though not completely), but no change in context will change a property owners desire to permit critique and parody.
What does this mean? Maybe it’s worth having two fair use doctrines, one for each theory. For example, whether private parties can contract away fair use would depend on which category we’re talking about: more likely permissible for the first and not for the second. This might also pressure copyright holders to simplify their system because the strength of their right will depend on the copyright regime’s ease of use. They will know that if they don’t opt-in and create a clear system, ‘fair use category one’ will eviscerate their right. Moreover, ‘fair use category two’ appropriately takes parody and critique off the table from private contracting and renders it an inalienable right. More fundamentally, when both theories coexist under one doctrine, as it does now, it creates confusion and compels the doctrinal gymnastics and blurry balancing that we’ve grown to despise.