I'm really sick of people calling something they don't like a "loophole". It isn't a loophole, it is just the result of how our system of government works. One state cannot tax a business in another state. This is a good thing. You can tax the point of sale in your state, however, the internet isn't in a state. So that leaves taxing individuals on an "honor" system for sales, which is an enforcement nightmare. So thus, why no taxes.
The answer? If it is unfair, it means we need to re-evaluate how we apply taxes to the businesses that we can tax in the state. Instead, we choose to be lazy and pound the square peg into the now round hole, because we know the square peg and love the square peg....