I'm finally going to weigh in on this. I couldn't get through 10 pages of debate.
I'm a software pirate. Not a distributor; a downloader.
I admire your courage, it took guts to be that honest here, and you do make some valid points. 
As a software developer, let me say something that might shock a lot of people here: under certain circumstances, software piracy might actually HELP the little guy (the small developer companies). Believe it or not, but a common saying within the software developers community is "You know you've 'made it' when your software gets cracked for the first time".
You see, most smaller software development companies don't have the budget (or the know-how) to make marketing campaigns. You can make the best thing under the sun and it will still be as if it never existed if nobody knows about it. Also, since you can't get everybody to like your stuff (because we are all different), the whole thing is a numbers game: another common (if a bit innacurate) saying in the developers community is that out of 100 people who download your stuff, one will buy it (and 1% is a good percentage, trust me).
This percentage will also vary greatly according to who you are targeting. Distribute your software in China, and your download vs. buyers rate will be nearly 0%. Distribute your software on a community related to what you do, and the percentage might climb to 10% or higher.
Thus, promoting his stuff is one of the most important thing a software developer can do. Until a software company reaches a certain level, it is VERY difficult to get other people (other sites, blogs, news sites, etc...) talking about their stuff, no matter how good the things they do are. There is just 'too much noise' on the Internet, with everybody shouting at the same time in an attempt to get noticed.
So, with 1% in mind, if only 1,000 people download your game/utility/whatever in a month, only 10 people will buy it. 10 sales per month are not enough to make a living. But if 10,000 people download your software, 100 will buy it, things are getting better and if you really love what you do you can now make a living out of it, even if not a very decent one. Lets say this is the norm for the small software developer.
If 100,000 people download your software, on the other hand, 1,000 people will buy it, and that latter number is a whole different ball game. For a small, relatively unknown software company, it is VERY, VERY, hard to get 100,000 people to notice you every month. Usually the numbers are much lower.
Now, with software piracy, the percentage of downloaders vs. buyers will be reduced exponentially. It will no longer be 1%, but, say (and I'm making this up), 0.1%. So, to make the same 1,000 sales, you will now need to reach a million people. On the other hand, because of the nature of software piracy, you don't have to do anything to promote your stuff: the warez community will do it for you. So, instead of reaching only 10,000 people, you might end up reaching a million. At 0.1%, that's 1,000 sales in a single month. If you sell your software for $20 a pop, that's $20,000 right there.
As a software developer, I know one of my best months was when a very high profile warez site placed an entry for the *shareware* version of Winstep Xtreme by mistake! Of course, the numbers would probably have been much lower if it had actually been a cracked copy, but it still demonstrates what I am saying.
How do you think Microsoft Windows got to be the standard OS for billions of people worldwide? Because, at one point, it was also the most pirated software on earth. OEMs, retailers and big companies still had to license the OS from Microsoft, but the average Joe just grabbed the installation disk from a friend.
Of course, once a company reaches a certain level and everybody knows about their stuff, it no longer needs the exposure provided by the warez community. At this point, the difference between 1% and 0.1% is indeed pure loss of revenue.
Now, does this mean I condone software piracy? Of course not!
I'm just pointing another side of the coin that nobody talks about (yeah, I wonder why you'll never hear the RIAA saying this, hehe). In my opinion, the real danger of software piracy is that it gives people a feeling of entitlement, a 'why should I pay for it if I can get if for free'.
If piracy becomes the norm, then nobody will value software or music or whatever anymore, even the people who would normally pay for the stuff they get. And that is why piracy must be fought at all costs, but NOT by charging the *end user* ridiculous fines. I think the fight against software piracy (and many other issues that plague our society) should start in our schools, by educating our kids and teaching them to value the effort of others. That they, too, can get there if they work hard enough.
At most, organizations like the RIAA should go to the source, i.e.; after those who actually *crack* the software, and those who distribute and profit from piracy by putting advertisements on their sites.
Software piracy, like smoking cigarrettes, is actually a cultural thing, after all. In China, for instance, NOBODY will buy your software because they have a different culture where software piracy is accepted and even encouraged. No Western software company will ever make it in China until this way of seeing things changes. But can it be changed? Of course it can - look at what happened with smoking in the US (and is now happening in other countries), where smoking is now frowned upon instead of being regarded as a symbol of style and independence (i.e. the Marlboro man). That's a good thing because smoking is bad for your health and for your pocket (and I'm a heavy smoker, by the way
).