No - "tail wagging the dog" is used when a minor or secondary part of something controlling the whole. The idiom for distracting attention is "Red herring" http://en.wikipedia.org/wiki/Red_herring
A "red herring" and "wag the dog" can have very similar meanings. But they're not exclusive. The concept of a secondary part controlling the whole is what gives "wag the dog" meaning. But focusing on that is missing the significance of the concept. To "wag the dog" does, in fact, mean to create an event to distract from another event. The concept differs somewhat form a red herring in so far as it implies action while a red herring could be misinformation or undue attention to a minor detail.
As it is, this story about the RIAA might be better described as a red herring; they're focusing attention on social deviants rather than the issue of copyright enforcement. If the RIAA were wagging the dog, they would be hiring someone to pose as social deviants to generate some news with the intent of drawing media attention away from stories that the RIAA's data on the impact of copyright infringement is largely manufactured.