I've been thinking lately about what I call "Objectivist Realism" (or more accurately "heroic symbolism") in the Randian tradition, and I think there is a connection to the difference between classical and hellenistic art. Classical art was concerned more with archetypes, hellenistic art more with individuals. E.g., portraiture was not well-developed in classical times but flourished in hellenistic times. I feel that Objectivist Realism is, too, concerned with setting up archetypes but that they are forced archetypes, not the kind of organic archetypes that developed in classical times. There is a concern to be heroic/uplifting/inspiring all the time in one's subject matter and style, which I find is less inspiring and heroic than pursuing one's more personal interests and directions. These heroic symbolists create some kind of archetypes but at the expense of both aesthetic excellence and individual expression. I think many of them are afraid of individual expression and that they're in art for the wrong reasons -- to "spread the word" or whatever instead of to create something whole and good. Also there is, I feel, an important aspect of play in art (homo ludens and all that), which these heroic symbolists miss out because they're trying to be so serious all the time. I feel like saying "lighten up!"
I haven't read Schiller's essay on sentimental art, but I've seen it mentioned often enough that I agree with it as far I understand its message. People who are philosophically-minded tend to produce sentimental art, I think. I've struggled with this myself, not always successfully. It's hard to take off those ideological glasses so that you can see things from the bottom up (as they are) instead of from the top down (as you want them to be). Interestingly, I think Rand started out (in We The Living) perceiving things in a fresh way, but that she got a bit stale in Atlas Shrugged and in her essays. She was always original, but later on she was more philosophically-driven and thus closer to what I call Objectivist Realism.
I think part of the reason for Objectivist conservatism is what I like to call the "doctrine of immaculate conceptualization" -- the notion that Ayn Rand correctly identified and expressed all important ideas in philosophy (and by extension other disciplines, since philosophy is the "queen of the sciences"), so that all that's left for those who follow is to apply those insights. The core idea here is that Rand is primary and reality is secondary, not the other way around, because Rand's conceptualizations are "immaculate" and immune from error. The danger to intellectual health is obvious.
While I wouldn't say that only artists are capable of creating inspirational value in the world (I think there is creativity in academia, in business, in the sciences -- there's a fine quote by Richard Halley in Atlas Shrugged on this topic), but I do think there is a special kind of creativity that, at their best, artists exhibit, because the value they create in the world deals exclusively with the concentrated embodiment of a vision of what is important and significant in human life. And by "what is important" I mean what is ~personally~ important to the artist. It's the personal element that gives art its inspiring power, and that makes impersonal or propagandistic art so flat and uninspiring. I think this is why so much art in the Randian tradition is uninteresting, because it is struggling to uphold a pre-existing vision of what is right and good, struggling to at all costs symbolize "the heroic" according to Rand instead of observing the world and reflecting on experience.