If instead the "thief" breaks into my car and copies all of the music from my iPod (let's say that all of the songs are recordings of my band to make things simple) and posts it on several torrent trackers, that's piracy (copyright infringement). I still have the originals, so no harm, no foul. In fact, I might be glad that someone is doing some free marketing for my band (or I might choose to cry about the billions in lost sales).
I'd argue that piracy has done more to help the music industry than it has to hurt it. Back when people bought music on $17 CD's, they only bought a handful per year. And once you lost a CD or it got scratched, you stopped listening to it. You could also only carry 6 at a time in your CD changer. With illegal MP3 downloads (and later, legal ones), people could suddenly carry thousands of songs in their pockets, and they never get lost or scratched.
Back in college, since music was now "free", my friends and I expanded our musical tastes beyond gangsta rap to include rock, country, trance, techno, classical, and jazz. With a new world of music open to us, we started going to local jazz clubs, raves, and concerts (which put more money in the record labels' pockets than CD sales ever did). I went to 2 Rage Against the Machine concerts in one weekend, even though I've never paid for one of their albums.
Just the other day I listened to the first MP3 I ever downloaded (August, 1998, Eagle-Eye Cherry - Save Tonight). I backed up all of my old MP3's on CD-R back in the day, and they've been passed from desktop to laptop to XBox to iPod to phone ever since.
Since all of these songs are always instantly available to me, these artists are still within reach, even the one-hit-wonders from yesteryear. If I hadn't downloaded Fastball's "Outta My Head" back in 1998, I would never have gone to see them perform at the Viper Room in 2008 (it was the illegal download of a B-side that made me appreciate them more than hearing "The Way" on the radio).