By focusing on the infinitely reproducible media (which cannot, strictly speaking, be stolen) the RIAA/MPAA made themselves look like idiots. But just because they failed to correctly identify what was being stolen does not mean that no theft was taking place. Focus on the money not changing hands (which obviously can't be duplicated) and the picture becomes a lot clearer.
Edit: Downvotes? I guess the truth stings, especially when the logic is airtight.