Maybe, just maybe, the problem is the copyright law that criminalizes a large portion of the Internet population? How about reforming that law, or at least adapting it to the 21st century? Like, you know, legalizing private non-commercial copying, as the various Pirate Parties in other countries are already asking for?
A large portion of the population also commits theft*. Doesn't mean it should be legalised.
I'm not going to sit here and deny that I have downloaded or shared movies (though I admit to nothing). But how can you justify a push to make copyright infringement legal, merely because it's done for non-commercial purposes? I mean, sure, infringement for commercial purposes is a bigger problem, because it happens on a larger scale. But copyright exists to encourage people to innovate and create.
Why would I invest days/weeks/months/years of my time, and hundreds/thousands/millions of dollars in creating something to sell to people who can make good use of it (as opposed to spending that time working for a salary, and simply holding on to my money) if you have a right to just use it without paying me?
Yes, I am aware of the open-source arguments, and yes, I have contributed to OS projects. But I have also taken time off work to try to create something new. I had to forego three months' salary, to do it. I simply could not afford to give it away for free, because, strangely enough, I couldn't find a landlord who'd give me her house for free, or a supermarket that would donate food to the cause.
OS software works because it's easy for many people to collaborate, and the equipment required to develop software is relatively cheap. The same does not apply to all software, and certainly not to something like music or film, which, at a professional level, simply can't be done without paying for access to specialised, expensive equipment, and specialist people to operate that equipment.
Your position would mean that if I produce something that's useful for commerce, then I deserve to be paid, but if I produce something for personal use (such as a music album or a film), I have to do it out of charity.
As it happens, I do compose music and write lyrics, I do record that music, and I choose to make it available online for free. But that's a choice I made, and a choice I want to have.
There are a lot of problems with copyright law in its current state. Big corporations have certainly tipped the balance in their favour, with longer copyright periods, etc. When copyright was first conceived, individuals created intellectual property. Copyright periods generally ran for some period of time following the creator's death. Corporations, however, are not natural persons, so they cannot die.
There's also the matter of US courts, specifically, awarding outrageously high exemplary damages, which, in turn, means that people agree to higher settlements. In Australia we don't have this problem. Australian courts are far more realistic in awarding damages, and also tend to punish plaintiffs that bring actions over very small matters. There's a reason why we haven't had many filesharing lawsuits in Australia. I believe that if a multi-billion dollar corporation went to the Federal Court to sue a teenager for downloading 300 songs, the Court would, likely as not, find in favour of the corporation (its copyright has, indeed, been infringed), but award only nominal damages.
The problem with your position is that it's just as bad as that of the corporations. There's a middle ground. You're both trying to tip the scales grossly in your favour. Right now the corporations are winning that particular tug of war. By all means, let's bring balance back in, but don't make the same mistakes in the other direction.
* I mean theft, not copyright infringement. You cannot steal intellectual property under Australian law. Copyright is a chose in action (intangible property). Theft is dishonestly appropriating property belonging to another with the intention of permanently depriving the other of it. Since a copyright infringement does not permanently deprive the owner of the intellectual property, it is impossible to have the intention to permanently deprive the owner of the intellectual property, and therefore theft cannot be made out. Infringement merely depreciates the value of the intellectual property.