There's a demand for movies. If you cut off the source, fans will make their own. They won't be the same (lower budgets), and their distribution will be different (initially theatres, protected by contracts), and they will have more product placements, but they will still be there. You won't have LOTR, but you will still have low budget talky stuff, suspense thrillers, and so on.
Eventually, animation techniques will allow fans to collaboratively make big budget special effect movies.
If movie company's wanted, they could survive quite well on theatre takings, and release stuff on DVD simply as collector items (after they movies are leaked online anyway). They would have to make cutbacks, but they'd still survive.
The main difference is - what a consumer does in their own home should be sacrosanct. Telling a theatre not to leak a movie (as part of a commercial contract) is fine, but attacking consumers for ripping a DVD they bought is not.