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I don't think digital goods / things that are very cheap on the margin really subscribe to the same laws of supply and demand.

For example, most people would probably agree piracy drives the price of photoshop up for the people that actually pay for it. In the eyes of supply and demand though what should happen is more piracy == less demand for legal copies -> lower prices.

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That doesn't have much to do with supply/demand not applying to digital/low variable cost goods; the same phenomenon can be seen in, e.g., clothing. The concept that theft of clothing pushes up prices is pretty much as agreed upon as your example, but has nothing to do with the marginal cost of production.

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