You make a sensible argument, but overlook a couple of key factors.
In the US, ostensibly we ARE the government ("We the people" and all that). We only have crony capitalists of both parties in power because the majority of the populous turns a blind eye while the minority funds them through the primaries/general election and puts them into power. Your complaints go to a larger problem that aren't really relevant here.
The rocket industry NEEDS oversight. These things in the wrong hands are basically weapons.
These freetards are not going to the theaters or buying DVDs or whatever, and therefore it is not a lost sale.
Actually, there is evidence that people that share files buy more than the average public.
There are two ways to write error-free programs; only the third one works.