Unclebob I don't want to **** on you, but I will, because none of this is about theft/stealing except for counterfeiting/fraud which is another matter altogether. If you don't understand that, please stop waving your "It's stealing" stick of moral/legal absoluteness and crying, it's not helpful.
The root of the problem is how the market fundamentally works. There is supply and there is demand. You match them and you get a price where hopefully everyone is happy. However in the event there is infinite supply this breaks down. With infinite supply the price is zero. There are also some physical things that are on a small enough scale are considered infinite, like air and water or fish in the sea. Anyone person can use as much as they want without harm, however given a large enough collective effort to exploit these resources, damage is done and with enough of it you have collapsed fish stocks, air pollution and undrinkable rivers. This is the tragedy of the commons and will happen to anything that is free and or infinite to any given user. This essentially happens to software.
However unlike these commons, any given piece of software is truly infinite. Sure there is the original cost of making it, but to any one given person because it is infinite, it's price can be anywhere between zero and total cost of development if only one person buys it. If you had prefect knowledge(never, ever happens) you could set a price where a majority of people would buy the product at a maximum profit, however there will always be people who will always pay zero or near zero for a whatever reason and there is no point bitching about it because this will always happen, but on the flipside there is always people who will always pay because they can both afford and appreciate this intangible good. The most important thing is that the price is set correctly and enough people feel they made a good deal so that one can cover their initial cost and make a profit.
So like the commons, you set an appropriate "price" like fishing quotas(Initial costs) and convince people to pay for the convenience of the fish at the fish mart(retail) for a reasonable price. There will always be people who go to the beach and fish/gather shellfish, but as long as this not too many people take too much, everybody wins. In fact once the initial costs have been covered, anything beyond that can be considered a bonus or reinvested back into more fish/bigger boat/games.
What people do with said fish/air/water is their own business, but this is the basis of why piracy exists and no matter how draconian the DRM or laws becomes will continue to do so. People don't like getting beaten whether it's once, or day after day, and more often than not grow more defiant short of crushing the human spirit or placing someone in an invisible prison ala North Korea or Stalinism or RIAA(via asinine lawsuits). While they make for short term gains, they make for long term disasters time and time again, so why not try something else where everyone wins? Answer : Because people tend not to care how much another person gains along they gain more even if everybody including themselves gain less aka game theory.
Until this is made apparent to publishers and devs will always bitch about potential unrealised gains as actual losses when if fact it is just economics is action and something to be adapted to, not something to be remade at will.