"indie" stopped exclusively meaning "independently released music" ten years ago.
I appreciate your sentiment to a degree, but "indie" is a legitimate shorthand description of a particular style/aesthetic. You could argue that ALL music genres/classifications are bullshit, but for the sake of conversation, it makes things easier.
"Indie Rock" refers to guitar based (typically) rock music that often has a lo-fi sound or is recorded cheaply/poorly. Ironically, this is less the case with the proliferation of cheap, yet high quality, recording equipment, and bands who still strive for an "indie" sound often try very hard to make their records sound "bad" The vocals are often "charmingly" out of key/sloppy. Chord progressions are often counterintuitive, and the playing can also be sloppyish. Alternatively, indie rock is also characterized by virtuoso musicianship, and the aforementioned sloppiness is often every bit a conscious choice as the lo fi recording style. Song's subject matter tends to be angsty and nihilistic on one end of the spectrum, or whimsical and silly on the other. This is by no means a definitive list of criteria, but i think it does the job. There are several "factions" of indie rock that can be very different (shoegazer, post rock, etc.), and some people still use the term "indie" in the literal sense with no attachment to any particular "sound", but mostly, it does refer to a style. Here are some good examples (in my opinion) of classic indie rock: Modest Mouse, Built to Spill, Dinosaur Jr., and Pavement. Those bands are certainly different, but they share quite a bit on a number of levels.
I could go on and on, but there's no point. All I really wanted to say is, "Yes, indie used to/should refer to any music that is produced outside of the major recording industry. But, the term has evolved and has come to describe actual characteristics of the music itself."
