For decades piracy has been opening up vast areas of culture previously closed off to people on lower incomes. Widely acclaimed works that form our common recent cultural heritage are available to all at almost zero cost. Why should anyone be without the entire discography of Nirvana, the Red Hot Chili Peppers, or any other cultural idea deeply ingrained in our many subcultures? It is patently unreasonable to expect every person on this planet to spend hundreds of pounds on such works, when they have already made their creators (and their creator's agents and publishers and so on) vastly rich.
Piracy is the natural state of things when the cost of reproduction is almost zero. Even by a market analysis, things that can be got for nothing are worth nothing (monetarily). How much is a litre of air worth? Nothing. How much is a gigabyte of film worth? Almost nothing.

Unfortunately wealthy copyright holders have undue influence on lawmakers. After dining at the Rothschilds' Corfu mansion with billionaire co-founder of Dreamworks Studio David Geffen, unelected Business Secretary Lord Mandelson drew up a bill to deal with online piracy. The Digital Economy Bill was announced in the Queen's speech in November and is now making its way through the House of Lords.
The bill raises the maximum fine for copyright violation from £5000 to £50000 and gives OFCOM numerous powers to monitor filesharing and inform copyright holders and ISPs (Internet Service Providers) of violations. The target is to reduce online piracy by 70% by means of sending scary letter to people, which if ineffective can be escalated to fines and termination of internet access. All of this would of course take place without any due process.
This is part of a larger battle to inculcate and defend the idea of 'intellectual property'. From my background as a Free Software programmer, I see intellectual property as a cynical application of capitalist property relations to the digital world where it just doesn't apply. Hundreds of thousands of programmers have contributed time and effort to putting together the free software that now belongs to everyone (Linux, Ubuntu, Firefox, Openoffice, Inkscape, etc etc). That their massive efforts have no exchange value only makes their use value all the greater.
A cultural flowering
By publishing their own work online and asking only for a donation, artists like Radiohead have shown that the fatcat publisher is no longer a necessary middle-man. Lesser known artists are also finding new ways to sell their work, for example by selling prints through community sites like deviantart.com.
But beyond the question of monetary remuneration, the growth of collaborative, free, digital cultural works marks the parallel growth of an attitude towards their ownership: that they are most naturally free, and the artist's 'royalties' are manifest as the respect of the community.
The Digital Britain Report (which preceded the Digital Economy Bill), noting the growth of user-created videos on sites like youtube.com, spoke of turning 'creativity into value'. This is the response of business types to the horrifying spectacle of so much work resulting in no profit. This is where the future of cultural work lies - creating for the pleasure of it and for the value it gives life.
Re: Digital Economy Bill: Enclosure of the digital commons
While the bill will probably be a blow to filesharing pirates in the UK, it will certainly not be killed, and will probably recover.
Persistent filesharers can just start using their neighbours wireless internet connection, there are even youtube video tutorials on what software to use, and how to use it. Its not as tough as you might think.
People can also rent "web-tunnels" - a service whereby you have a static IP address, hosted in another country. All your internet traffic is encrypted to and from this proxy, and any investigation will lead to this IP address, not to your real one in the UK. This can bypass the filters and surveillance proposed by the bill. The founders of the Pirate Bay, for example, host this sort of thing.
There are also new anonymous and privacy preserving torrenting methods, which will inevitably become more popular and sophisticated if this bill goes through. One such example of this is "friend-to-friend" torrenting, using clients such as OneSwarm.
And with the price of flash memory dropping rapidly, people can just copy hundreds of films and albums onto their USB sticks, and exchange them in person!
Piracy is here to stay.