It takes some nerve to claim that the defense is incompetent, and then suggest completely moronic theories. Even if you took a basic intellectual property law class, you would know that everything you are saying is completely wrong, and would get you laughed out of the courtroom.
First, copyright law specifically does not require proof of harm, or anything like that. You can always ask for statutory damages, even if the other side can prove your losses were zero. Statutory damages are about $150k/infringement.
Second, I fail to see the relevance of Media Sentry not being licensed as an investigator, especially since they were not investigating anything. Are you saying they can't testify as witnesses? That would be pretty ridiculous. What if I observe someone selling pirated CDs on the street? Are you saying I have to be licensed as a private investigator before I can testify in court? That's a pretty ridiculous argument.
Seriously, courts do not like people getting off on technicalities. It sometimes happens, but if you actually committed $1M worth of infringements and got sued for it, it's not really a good idea to go to trial with that. Regardless of what you think of the justice system, it's remarkably good at upholding the law.