Usually, I look forward to Sweatyboatman's posts since he is so often "the voice of reason." However, he is really missing the boat on this one [pun intended].
The argument that the pirate/thief wouldn't pay for the game anyway is specious. The pirate/thief's argument that he would buy the game if he liked it is also a lie. There is always an excuse why he won't pay for any particular game.
It's true if there are 10,000 potential pirates for a given game and pirating was somehow completely eliminated, you wouldn't instead have 10,000 additional sales. However, sales would increase. And for those who pirate but wouldn't buy anyway, it is still stealing. "But officer, sure I ran through that stop sign, but I wasn't going to stop anyway."
I am not defending piracy. It's lame. Most games are priced fairly and provide a lot of entertainment bang for your buck. I find the major cost of video games to be the time I waste playing them when I could be doing something productive.
I think it's important to quantify just how many sales 10,000 pirates turns into if piracy vanishes? IMHO, generously, maybe 500. Meanwhile your player-base essentially just got halved. You're going to lose a lot of sales because half of the people who would have been talking about your game instead never played it.
To my mind, piracy is something kids do. It's like sneaking into movie theaters; it's harmless and you grow out of it.
Quoting Earth Force Captain,
By pirating a game you are making use of something without paying for it, therefore stealing. And if you aren't prepared to pay for something legally, then you shouldn't be using it at all.
I hate this definition; it seems to suggest that anything that's free is stolen (air, for example. or the genes to Monsanto's corn.). I think a key element of theft is loss. And in the case of piracy it is particularly difficult to show that anything was lost.
Edit: also, thanks to coyote303 for the kind words (and the pun!)