A couple people have touched on this point, but nobody has done a great job of explaining it.
Let's be real.. Software IS overpriced. Not only is it more expensive than it was 7-8 years ago, but its costs are way down compared to what they were back then.
When I got my first PPC in 2001ish, I bought a bunch of software for it.. The most expensive piece of software I bought was 19.95. That price included the cost of development. production, marketing, wholesaling, and retailing. Back then, nobody sold their stuff online.. It was all retail.. The developer probably ended up with $6.50 of the $20 I paid.
Today, not only are developers saving a TON by not having the same production costs, but they're now banking the entire amount by cutting out the middle men (with some exceptions).. They're not only making 3x as much per unit, they're selling 50 times as many units, because EVERYONE has a PPC now, where very few people did as little as 3-4 years ago.
You can point to piracy as a cause, but the true cause is greed.
Now, to change the subject a bit to music piracy.. I find this argument hilarious, because there are a TON of bands who are big names specifically because of piracy, and the online music movement.. In fact, many record labels release music for free download now just to promote their bands, yet at the same time, they complain about piracy hurting the bottom line. Almost everyone I know downloads a CD before they buy it, but most everyone I know actually buys the CD if it's worth anything.. The ones that suck are the only ones getting hurt, because I don't know anyone who goes back and buys the 2-3 individual songs that they liked, but if they like the majority of the CD, they go buy it because they want the cover art and insert.
Piracy helps these industries just as much as it hurts them. As has been stated, Piracy represents a fairly small percentage of the copies of software in circulation, but pirates are usually the most informed about their devices, and the most likely to show their stuff off. Every pirate has at least 3 friends who are either wealthier or just more "honest" than them, who want the software and buy it.. If it weren't for that pirate (who probably would have lived without a piece of software rather than buying it), the developer probably would have lost a couple sales.
To some extent, Piracy is a form of free advertising for developers, and we all know that's the truth.
Now, I'm not just making excuses.. to be honest, I have NO "cracked" software on my PPC.. I've downloaded a few things to test them, but I always delete it or buy the full version. Trials are limited, and generally annoying.. WIth a crack, I can trial it until I can make an informed decision as to whether or not I want to buy the software... With a trial, that may not be the case..
I also find it funny to hear developers crying foul... As someone stated earlier, 90% of todays developers (including bill gates) learned via piracy and reverse engineering. In fact, nearly every developer I know personally is STILL using pirated versions of
VB and other various software...
As someone stated earlier, if you want to combat piracy, lower your prices to a more "fair" level... however, most developers would never do that, because they'd rather sell 5 out of 7 pieces of software for full retail with 2 people pirating it, as opposed to selling all 7 by cutting their price by 30-50%.