You think Bernie Madoff should have walked?
How is losing all your booty not a big enough deterrent ?
Edit: Also, I'd like to make a distinction here between copyright infringement and financial fraud. I don't think it's been proven yet that people are losing jobs and companies are becoming bankrupt because of large scale copyright infringement. That isn't the same as financial fraud. Personally, I'd like my tax dollars to go first to a jail that houses someone that poses immediate physical danger to me or someone else. Then a list of other things. And finally to those 'dangerous' young'uns from the pirate bay. They're pretty far down the list of evil doers.
If that's all you lose, it's not a deterrent at all. If the punishment for stealing is simply that I have to give back all that I got caught stealing, I would never not be stealing because there would be absolutely no risk that I would end up worse off than my present state.
If you do have money to begin with, taking it all away and imposing fines/wage garnishment as penalties are a major deterrent.
For someone with Madoff's connections, it wouldn't be hard to acquire a false identity and resume some kind of low-level fraud. Putting him in prison is the best way to protect the public IMO.
I personally think that prison sentences are just as valid for non-violent crime as violent crime anyway. It's a disincentive, it's aptly punitive in cases such as Madoff's, and it makes it harder for the offender to re-offend.
Lets also eliminate the difference between infringement, and fraud. Next time apple sues someone that infringe on their swipe to unlock patent, they should add a fraud case to it. How dare those phones deceive users with Apple's gesture!