Possibly the wrong example for your argument :) Jet engines can now be designed by a team at SpaceX rather than at NASA, and the team can 3D-print them. That seems like reduced-cost innovation compared to decades past.
http://www.fool.com/investing/general/2014/06/02/elon-musk-m...
(PS - I definitely don't disagree with your general point, but it might be becoming harder to know which areas need patents and which don't.)