1. There is certainly a large number of people who will pirate whether the game is $60 or $5. If you made pirating easier and consequence free, itd be a donation model. Gabe Newells statement speaks more to doing the best under bad circumstances, than openly espousing piracy (make games cheap enough that paying is worth the convenience of going through hoops to pirate it). If he was fully sincere in that statement he ought to allow all their steam store to be downloaded for free.

If you cut down the difficulty of cracking a game, and generally made it easier to pirate, wed just have a nice cracked Steam store anyone can download any play anything they want, do you really think thats going to help the market?

2. Characterizing the buying and selling of a goods, a non essential like a video games no less, as an "ultimatium" is ridiculous. By pirating youre just subsidizing the cost of the game onto people who paid for the game legitimately.

You developed the game, you have the right to charge whatever you want for it.

Perhaps there are arguments to be made since copies of digital goods are essentially free, but this isnt it