Sewn - Well, the fact is, if you don't include something like that then theft of your product runs even more rampant.
Pirates don't care, but the rest of us should. Pirating hurts all industries. Software prices go higher and higher. Security has to increase more and more making things harder for legitimate users.
Sumez - You are right. It's impossible to stop someone from just recording the output on a CD player while playing the disc. It is more of a hassle though. Isn't that what it always breaks down to? You can't stop everyone, but you can make less people feel like going through the trouble.
Honestly I wouldn't mind having to always listen to CD's on a player. That's how it was a few years back and no one complained. If that means people will steal less music I am fine with that. However, I think a better idea is to use some other smaller format like SD cards. Then people can still listen to music on ultra portable devices but we can still protect that music. Let's face it, iPods are here to stay. But they could always change them so you just listen to subscriptions services and podcasts, then add a slot for SD card albums you actually paid for.
Snarf - It's impossible for sales not the be effected by illegal file sharing. Specific numbers are impossible to establish either. I know the big labels have only recently started recording digital sales.
I think what this all boils down to is that until the internet is actively policed by an international organization, musicians, independent software developers, photographers, etc are all fucked. The only alternative to that is to shift the market back to physical sales by changing the way music is packaged and the way we listen to it. Both options are possible but I think the second option is more feasible as the only way an international organization could be implemented on all countries is by force.