Here's the issue... shoddy morality grounds or not, people en mass (all around the world too, not just the US) are not respecting copyright law.
Alcohol was illegal in the 20s... Did that stop everyone? It's legal now, isn't it? Legal issue became a moral issue.
Like it or not, as time goes on I think file sharing is going to follow the same path as prohibition. More and more kids are being brought up with getting payware for free. This is especially happening because many of the napster generation now have their own kids who think downloading music/movies/games/etc is perfectly okay (or they "know it's wrong", but do it anyway because morally they are okay with it, like say.... jaywalking).
In general, when millions upon millions of people are breaking the law every day, it seems to me that there's something wrong with the law.
Here's the crazy thing... I run a software company which survives by customers paying for the software of course. Would I be pissed if someone was running a copy they got for free? Yeah... I would be if it was a company using it for-profit. If it was some kid in a basement... eh, that's okay with me.
For me, morally it's a really tricky issue. Reading about grandmas, teenagers, and college students getting sued for hundreds of thousands over downloading an album or two makes me cringe. Reading about companies getting shut down for selling knockoff software or hardware makes me happy. There's a line somewhere where it all makes sense but it's not well defined.