And that still leaves two other arguments. Personally, I downloaded a lot of music and movies when I was a poor HS/college student and there was literally 0 chance of me purchasing them as an alternative. The lost profits argument just doesn't apply.
1: An album is available for $10. It is worth $5 to me. I don't buy it.
2: An album is available for $10. It's worth $5 to me. I pirate it and obtain it for $0.
The second set of circumstances is better for everyone: I have gained total welfare of $5 and no one has lost out. I don't see how this is worse than the first option, or morally wrong..
It isn't your right to choose the price you'd pay for something and then copy it if you feel so inclined. You either pay the asking price for a good / service, or you don't pay and don't enjoy the benefits of the service / good. This is why copyright infringement which subverts this system is illegal.
Even if you do think copyright is still appropriate, it needs to be carefully managed. In general, the purpose of copyright was never to ensure authors have some 'right' to control their work in perpetuity, as is commonly assumed today --- you can see that at work right there in the US Constitution 'To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries'. There's some interesting discussion here http://rufuspollock.org/economics/papers/optimal_copyright_t...
I'm sure that the artist getting a new fan, and becoming more popular for free is a very dangerous process indeed :-) ...