Yes. it is illegal.
Copyright law is coded specifically and framing illegal activity in any context doesn't make it any "less legal."
The problem is that copyright holders cannot afford to go after massive violations, and so they are getting ISP/governments to do that job for them.
Copyright protection of digital material is simply impossible.
Just as we individual users of the Internet have no way of absolutely protecting our private data (and have largely learned to just accept it) it's just a matter of time before copyright holders run out of ideas as to how to stop piracy.