By copying and distributing the work of others you reduce the income they get in reward for their work. Take it to the extreme: if everyone in the world got hold of movies, music or software for free, why would artists and developers continue producing original works if they're receiving no reward for it? A warm fuzzy feeling that people like your creation doesn't put a roof over your head, nor does it put food on the table.
Hmm, let's find out. Maybe people will do it solely for artistic reasons, with no regards to a commercial return. If that doesn't work, then the worst case is we train all those people previously involved in the commercial side to work as something else.
"If anything can go wrong, it will." -- Edsel Murphy