I share some of your feelings, although i also believe that downloading copyright material is not right.
Anyway, take a look at how the game industry is managing the situation, specifically at what has SteamPowered has done or is doing. Whatever security mechanism is implemented into game protection, it's always possible to hack it and most games are available for download on torrent sites, at least. But even that comes with it's own problems:
* cracks sometimes cause instability problems to the games
* although cracks are included in most downloads, when a game patch comes out, if the gamer wants to take advantage of that patch, he needs to lookup a crack for that version, if it's available
* you can't trust the downloads not to have viruses or any other form of malware
* if you wipeout your data (either intentionally or not) and don't have backups, you need to re-download the game(s) and repeat the above process. If the game is "old", it will be more difficult to download it as it may suffer from the lack of seeders
Now take a look at (Valve's) SteamPowered platform:
* it has a (centralized) store with a large number of games, both recent and older ones, mainstream or indie, meaning you have very easy access to content
* in games as in movies, ultimately the user is not interested in the physical copy, as file sharing success has proven. When you buy a game, your "possession" of it is associated with your account. To access it (from a fresh OS installation or not) you only need to install a thin client and select which games you want to download and that's it
* you can buy games as a gift for others
* it even stores your save games on the [steam] cloud
* games patches are downloaded and applied automatically
* the store usually has a lot of price cuts on "old" games or promotions
and this, i believe, is creating serious competition even for "free downloads". Why would i download a game on the torrentz and risk my computer security and etc when i can just buy it for a couple of bucks, with all the advantages of having it through the SteamPowered platform?
Downloading movies from the interweb, although for "free" also has it's downsides, like:
* quality
* getting proper subtitles if it's in a foreign language
* if you lose the downloads, you need to re-download and hope to have seeders
* not everyone is a proficient at using torrent websites. My mother uses a laptop but doesn't have the skills to properly use them
what i'm trying to say is that i fail to understand why the film industry doesn't start treating the "file sharing" as competition and create a better service than "free as in beer", because obviously they won't "win" any other way, their business model is obviously being made obsolete with the advance of technology.
Why not create a similar platform as Steam, where you can buy films at a lower price which are associated with your account and that you can download entirely and copy to a pendrive to stick on your TV and/or stream onto your computer? with similar features as Steam?