Some thoughts on the topic in general, and personal experiences:
* On de.wikipedia, the second largest wikipedia, we only allow free images. One can easily see what effects a "no fair use" policy would have by comparing en and de articles. No album covers there, which is not really a loss IMHO. On the other hand, having next to no images on celebreties (living or deceased), compared to en, is a pity, but can encourage people taking such pictures and uploading them. I did that myself already.
* Uploading of free images should only happen on commons, however, many *new) users do not know that, or they know and don't want to create Yet Another account on commons.
* Also, free images on en.wikipedia should be moved to commons. I already moved my images from de and en using my commonshelper tool. However, for large volumes, this is still a pain.
* I hope/expect to see some ease of use and attraction to commons from Single Login (really soon, now!:-) and the extended file management (by Tim Starling, I believe). Combining these two, I hope it will be possible for users (or at least admins) to "transparently" move images from xx.wikipedia to commons with a single click, while fully preserving upload history. I certainly would take part in such a "mass movement" (pardon the pun).
What can be done right now?
* IMHO awareness could be raised concerning the "fair use problem", and I'm not talking about this mailing list. Maybe an automatic, big red border around all fair use images? Along with a hovertext asking for help in replacing it with a free image?
* Maybe more extreme would be a "no fair use day", where we replace all fair use images in all articles for one day with an appropriate message?
* If this is not done already: A bot could flag all new fair use images for deletion if they are not used on an article say, three days, after upload? That would give time to flag it fair use and to put it into an article, or remove it if it's not appropriate there.
* Commons and other wikipedias, especially "free images only" ones, should be systematically and repeatedly screened for free replacements of fair use images. A bot or a tool could do this semi-automatically.
* Attempts to get free replacements for fair use images should be more organized. The current single wiki page (or group of pages) on each wikipedia/commons is neither well-known nor particularly nice. There should be a central place for all wikimedia projects where images (or files in general) can be "requested". That place could then be advertised, for example, in the sitenotice. "Did you take pictures on a concert? Happen to catch that celebrity on film? Help improve wikipedia! Upload your photos under a free license on [[commons]]! See [here] for what images are wanted badly, or add some requests of your own!". Have an "image raiser" in between fundraisers :-)
Concluding: IMHO fair use per se is not a problem on en.wikipedia. The problem starts when the average user thinks it is the norm, rather than an exception as it should be. As stated above, fair use images should be more clearly marked as "being problematic", and that they should be replaced by a free one ASAP.
Cheers, Magnus