Listening to an old Veganfreak podcast with Gary Francione talking about how demand from the public leads to bad meat production made me think - does demand for wool and silk lead to the harsh farming methods used in fibre production. I think so. This isn't just limited to protein fibres (wool, silk) but also in cellulose (cottons, linen) as farming for cellulose is also environmentally harsh, and does not include leather or fur production as they are a whole different ball game, both as processes and in ethical terms. However as wool and silk directly use animals they could be seen as being as morally wrong as battery farming.
Does consumer demand lead to bad farming practice - I think the answer is yes. Demand for cheap woollen clothing leads to practices such as mulesing and to sheep being treated as commodities rather than as living beings.
Silk is a tougher question as it is not known for being cheap. Silk is produced by boiling cocoons to release the fibres the silk worm has spun aound itself. However, if the cocoon is left until the worm has morphed into a moth (which chews its way out) the fibres are damaged so the worms are boiled inside along with the cocoons. Personally I see this production method as highy unethical, however as poorly fed and housed silk worms produce poor silk they tend to be kept in slightly higher conditions than a lot of other non-humans used to produce things for humans.
More about this when I have thought about it further.