What is happening here seems pretty clear to me:
People are looking for entertainment, they are finding some on YouTube, they see an ad for more of the same enjoyment, they whip out their credit cards and pay for it.
If this story happened in a college dorm room and the entertainment-seeker's roommate had them all on DVD already, he would have said "Here, watch mine." If he had them all on his hard drive, he would have said "here, plug in my external".
It seems like people are simply following the path of least resistance.
I agree 100%, and any discussion of online piracy that does not include this concept is horribly, horribly incomplete.
People want media in easy-to-consume form. They want it easy to browse and get.
Most will pay a nominal sum for it. Some will not.