Supply and demand. Give them what they want and they pay you for your work. If you don't play what the customer wants and don't provide a professional service you get treated as an amateur. Playing original material though is a hiding to nothing unless you have done the toilet gigs and built a following over the years. Be professional in your attitude and get professional fees.
Perfectly possible to get paid for gigging.
Tribute bands and function bands pay good money, but it's hard work.
Pub bands will pretty much cover expenses.
Original material will probably lose you money even if you get signed.
I think when the beatles were a cover band they played what was current at the time. Cover bands now seem to be playing the same old covers and getting fed up with them. Maybe the audience feel the same. I think to get paid well it may be worth taking some present hits and having a go at them ie Bruno Mars, all the tarts stuff you know, just sell your soul and have a go or do brown eye girl again. Try Rhiana or something. Plenty of cover bands have tarts singin male parts so vice versa.