People are lazy and easily corrupted. They try to get away with things, and are allowed to within the limited context of what the population as a whole considers normative. Exorbitant rent, ridiculous prices for goods and services, and absurdly high salaries for CEOs are accepted if not defended by the majority because in the name of personal freedom, we have decided that there should be limits on our ability to sanction or impose rules of behavior.
On a case by case basis downloading is a minor offense, with an economic impact only because it's popular. In the minds of the majority a petty crime is being redefined as an acceptable if not moral act. The people have spoken (and we are not after all talking about murder.) Hollywood and the rest should find another way to make money off their products.
This is an outline of a complex argument, but I'll leave that to somebody else.
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