The environment on early Earth was a reducing environment. An environment where free or bound oxygen would readily join with hydrogen to produce H2O. A reducing environment requires that there be a surplus of electron-donating atoms (hydrogen, Carbon, Iron) compared to electron-receiving atoms (Oxygen, Chlorine etc)
On Earth today, there is very little which can be oxidised which hasn't already been oxidised. We as a civilisation are searching the Earth's crust for material we can oxidise to operate our carnot heat engines, to power our industry. Even if we oxidise every molecule we can of hydrogen and carbon as-yet unbound with oxygen, it is unlikely we will run out of oxygen. Yet on early earth, elemental iron existed.
The conclusion, therefore, is that although photosynthesis may have fixed some carbon, this cannot be a significant route by which we have 21% free oxygen in the atmosphere unless the trapped deposits of carbon (coal and oil) are far larger than we anticipate.
On Early earth, the atmosphere contained a significant concentration of the reducing H2 gas. Any free oxygen would be quickly reduced to water. Since then, I suggest the amount of Oxygen on Earth has remained essentially constant. The amount of hydrogen has changed.
In the upper reaches of Earth's atmosphere, water vapour, hydrogen and oxygen is irradiated by the sun's intense rays, causing ionisation and an equilibrium between H2, O2 and H20. The H2 itself reaches an equilibrium with the hydrogen concentration in the solar system, which itself reaches an equilibrium with the hydrogen concentration of the interstellar medium.
As the universe expands, the concentration of the interstellar medium, consisting mainly of hydrogen, becomes weaker. As the amount of hydrogen falls in the vicininty of Earth, the equilibrium in the atmosphere between oxidising and reducing agents also changes.
As the universe continues to expand, unless we pass through a region of space with a higher hydrogen concentration, we can expect our atmosphere to become increasingly oxidising. As Hydrogen becomes rarer, the equilibrium reaction favours O2 over H2O.
Conclusion: The current concentration of Oxygen in Earth's atmosphere is as a result not of photosynthesis, but as a result of the concentration of hydrogen in space through the mechanism of the equilibrium of water and it's constituent atoms.
Nicholas Hill. 2nd April 2013.