This explanation from down in the comments on this article is awesome on top of awesome:
Let me address your question as a content provider whose products (DVDs) are heavily pirated, who at one time was a computer games programmer whose games were heavily pirated.
I used to get very upset about piracy, and spent a lot of time and effort fighting it. But I eventually realized that it didn't cost me much money in the long run.
The reason is simple: thieves don't buy. If they can't get it for free, they won't buy it. They do not represent lost sales.
The real target shouldn't be individual infringers (stealing for their own use) but bootleggers; those that steal to sell to others. Because those guys are actually costing you money. Alas, usually it is not cost-effective to sue them.
Technological fixes like cutting off their DNS are pointless; there are multiple examples in recent history of technological arms-race failures (copy protection wars, for example). It becomes a giant game of whack-a-mole, similar to the problems with fighting bootleggers on eBay... sure, you can get the auction taken down, but another one pops right up again.
The only long-term solution is to make the product cheap and as easy as possible to get.
Amen on that last one. Look, I was one of the early Napster users back in the day. I used Napster (and its successors) not because I was interested in stealing, but, rather, because it was the only way I could get digital downloads of music I was interested in. Once everything became available via iTunes and Amazon mp3, I quit using those services because the industry was now providing me with what I wanted: music that didn't take up space in my tiny cluttered apartment (since it lived on my hard drive).
The music videos that I showcase here? I've bought most of those songs on iTunes. It's easy, takes a few seconds to find in iTunes, then a single click and 99 cents later I have a song to share with my iDevices so I can hear my music anywhere. So now here's the MPAA whining that movies are being pirated and thus they should be allowed to take down any site anywhere based on just a simple complaint... uhm. Look. If I could buy a movie via iTunes for $9.99, or an episode of a TV show for 99 cents, like I can buy an album or song on iTunes, I'd probably do so. But I *can't*. Meaning, if I want to buy a movie I end up having to go to a retailer web site, select physical media, and wait (since most of what I want isn't in any retail store locally). Bah humbug on that, I'll just rent it from Redbox(which has a machine across the street from me in a drugstore) if it's a recent release or Blockbuster-by-mail if I gotta actually get outta my seat and do something. I'm a busy penguin. I just don't have *time* for that BS.
-- Badtux the Reality-based Penguin