First of all do I think Aereo was a good idea? Yes. Do I think they made the correct argument in court? No. See Aereo was arguing that they were just a DVR you could access, and while true it's not the best argument. What they should have argued was that they were like Community Access Television (CATV) companies in the days before cable, then they could have shown a precedent and had a chance at winning. Let's face it the conversion to digital TV signal has made the signal worse, and channels are harder to get because of it. They could have said "we are just providing a clear signal over the internet to those who have trouble getting a clear signal because of the location they are in, the only difference between Aereo and CATV providers is we use the internet."
So what is the solution? Well first Aereo needs to be more like a cable company and pay re-transmission fees to stay in business. But on the broader scale we the people need to stand up and demand that laws be changed to allow and protect this kind of innovation instead of protecting the mega-companies. Also we need to demand the Sherman Antitrust Act be enforced against the cable companies and break up their monopolies, this would not only give consumers a better deal due to the fact that there would be actual competition for our money instead of just "oh well it's us or nothing", but also it would have the bigger effect of protecting the internet without having the FCC declare the Cable/ISP companies utilities.
Now what do I think would be the right thing to do? Well all of it or else I wouldn't have written it would I? But there is another idea, how about since the broadcasters don't want Aereo giving people a claer siginal they go to the cable companies and say "alright we will only charge you re-transmission fees for subscribers and since we shut down Aereo and are feeling like generous gods today we will let you sent the OTA signal out for free and you can hook up every customer with a cable line to make sure they have crystal clear signal 24/7". Not that it will ever happen since broadcasters and cable companies only care about money and not about giving good programming or service.
So there you have it, let me know what you think in the comments.