We are all photographers now. Snapping and snapping away, in public and private, we shoot mundane and standardized images we would never have bothered to take just a few years ago: photos of foamed milk on coffee, or of ourselves half-drunk in bathroom mirrors. At parties the guests are now their own paparazzi. Beyoncé herself has to yell at her audience to "put that damn camera down" and pay attention to her performance. People are taking photos in church, in courtrooms, in the voting booth for goodness' sake.

A ripe time, you might have thought, to be in the photography business. Yet this week saw the latest and most painful episode yet in an ongoing corporate horror story: the collapse of Kodak, which a few decades ago was so dominant that it faced monopoly accusations but has now spent 19 months in bankruptcy. Since going broke it has spun off divisions, sold patents, and laid off vast numbers of workers in an attempt at revival. As recently as the 1980s, when a Kodak job was still a job for life, the company employed more than 145,000 people. When it emerges from bankruptcy it will employ just 8,500. (Instagram, by contrast, employed exactly 13 people when Facebook bought the company for $1bn last year.)

On Tuesday Kodak was reanimated – a word fit for a corpse – when a federal judge approved its plan to exit bankruptcy protection. The resultant, brutally slimmed company bears no resemblance to the giant of old. It has no consumer business. Instead it will specialize in commercial printing, high-end cinema, and a little touch-screen technology. Cameras, printers, and 35mm film in the iconic yellow box are dead and buried.

Kodak's demise, said the bankruptcy judge this week, was "a tragedy of American economic life" – and it is even truer than he realizes. More than 50,000 retirees have seen their pensions slashed if not totally eliminated; shareholders were wiped out, while creditors will be getting four or five cents on the dollar. An entire city, Rochester, New York, has lost its center. Yet the demise of Kodak is also a tragedy of cultural life: a reminder that we are not living through some photographic golden age, but a grimmer moment where volume disguises sameness and even our emotional and creative acts have been subsumed into the ruthless logic of the tech industry.

Photography was invented in the 1830s – invented twice, actually, in two different techniques, by the Frenchman Louis Daguerre and William Henry Fox Talbot of England. What pushed photography into the mainstream was a later innovation: roll film, developed by George Eastman, which replaced toxic chemicals and reactive plates with a safe, small transparent strip. "You press the button, we do the rest," went the slogan for Eastman's Kodak camera in 1888. President Grover Cleveland had a Kodak back in the day. By 1900, when it released the simple Brownie camera (price $1), so did almost everyone else.

The fall of Kodak has been widely misinterpreted as a story of inevitable technological progress, with the Rochester giant cast in the role of short-sighted Goliath killed off by a bunch of Silicon Valley Davids. Yet Kodak was never afraid of technology. On the contrary: it invented the digital camera, way back in the 1970s (with a resolution of 0.1 megapixels), though soon competitors such as Sony and Canon overtook them. Every best picture Oscar winner was shot on Kodak film until 2008, and Lunar Orbiter I, which took the first photos of the earth from deep space, was shooting Kodak film.

What Kodak feared, not incorrectly, was the loss of its vertically integrated system, which brought in massive revenues. Kodak enjoyed profit margins of 70 to 80% on photographic film, which customers bought over and over once they purchased a camera. Consumer electronics operate as a much lower margin. Digital cameras made things even worse, cameraphones worse still. "We do the rest," Kodak used to boast: but with digital photography there's no rest left to do, unless you count the addition of inane push-button filters to make it look as if you were eating your cronut during the Civil War.

It is actually a story we in the news media find dispiritingly familiar: the collapse of your business comes not when nobody is interested in your domain, but when interest is high yet you can't make the numbers work. As with the death of print media, the death of photography – not just analogue photography but also high-end digital, where profits have also evaporated – has been accompanied by social media alternatives that at first appear open and democratic. Yet these social versions turn out to be not just shoddier than what came before, but more homogenous too. All photos are now pretty much the same photo, and their value has plummeted accordingly, with devastating effects for both working photographers and photography companies.

How, indeed, do the new photo sharing apps make money? Not from sales, but from the exploitation of users: affording them a veneer of self-expression to convince them to slave for free and produce oodles of data. Instagram may have only had 13 employees on the books, but really it has more than 100 million people who work for the company, providing immense amounts of personal information and location metadata. Instagram users' pathetic and narcissistic freakout in December over copyright terms, as if anyone wanted to sell your cat photos in the first place, totally missed the point. The value of any photo is pretty much nil, as professional photographers have learned to their dismay. Only the data attached to them, which you give away in every social media app's terms of service, have real value.

The economic picture might be less upsetting if the upheavals of the digital age had led to some explosion in creativity and cultural production. But of course the opposite has happened: fine artists such as Tacita Dean or William Kentridge have led a noted comeback (pay wall link) for analogue forms of image-making, while Instagram has made the rest of us not artists but cogs. Volume may be up, but creativity is down – and at the risk of shocking the army of selfie shooters, I have to tell you that this is by design. Our supposed acts of creativity are just another node in corporate production. Such is the real tragedy of the death of Kodak: it exposes the devil's pact between our own narcissism and the brutal business models of Silicon Valley, whose young potentates turn out to be far less generous than George Eastman.