I doubt more than 1% of Netflix customers has any idea what a VPN or proxy is - let alone how to set one up.
Also Netflix originals seem to be doing quite well. Daredevil and Orange is the New Black in particular see to be all the rave, and Marco Polo is one of the best shows on TV IMHO.
Realistically, there is always a breaking point of people. Piracy is easy. Any of the above shows that I want to watch I can still pirate pretty darn easily. The only way a company is going to get someone as a customer is that their pay service is easier than piracy and cheap enough to make the piracy too much hassle.
At $8/month Neflix was at that rate. At $10/month apparently some people start to decide it's not worth it. $2 isn't much but that's a 20% increase in service price. Personally I kept my Netflix subscription - but the price hike actually did trigger me to cancel Hulu as I didn't feel like paying for both as they inch up in price.