You're missing the point.
a) removing DRM but retaining nasty container formats that noone else plays makes little difference to who will buy music from iTunes. If you have a non-Apple player, be it hardware or software, AAC is not the format you want to buy music in. Especially if you're one of the huge drooling mass of Apple users who couldn't tell a container format from a codec.
"You can convert it" scream the fanbois, but who wants to convert it? Why can't these jokers just sell the damn stuff in FLAC or at least ogg or mp3 in the first place? Why should I as a music fan want to buy a file I can't play and then spend time and effort converting it (with quality loss to boot) when I can just go download a release that some warez scene pirate has lovingly ripped it and released it in a nice playable format? For free, with no effort on my part other than hunting down the particular release.
Selling crippled formats like AAC is not going to change anything. Whether it has DRM or not has no practical implications for the piracy of the music. Had they decided to sell for instance FLAC copies of the music instead, this would be something very different to the customer. They would be able to pay very little and get just as good of a product as if they'd pirated it. Most end-users think p2p downloading is a big hassle, and the industry could easily tap into that frustration by offering high quality products for a fair price: downloaded and in a completely open and common format.
They have all so far failed to do so, EMI as well.
b) "Gradually piracy should fall away" says you. Why? It will not, I guarantee it. However, more people might actually pay.
c) "everyone still has Kazaa, or they can still get a copy of BitTorrent" .. Kazaa and most bittorrent warez trackers are the very last place pirated materials end up. The scene groups that release pirated materials as a "sport" do not mess around with end-user P2P software like this, they never have. All these networks do is make it easy for "end users" (i.e. completely clueless noobs) to download this stuff, even though they really have no more computer skills than required to surf a web page. Meaning, you can shut down Kazaa and the likes, but all that will happen is that the consumer stage of piracy is affected. The piracy as such continues, and it is just a matter of time before the tech-savvy once again enable their clueless friends the opportunity to partake in delicious warez without learning how to do a TLS-encrypted FXP race to boost your ratio on that 0day FTP site. You can build a dam, but you can't stop the river.
d) "Video comes with CSS protection, which although it is thought of as weak encryption protection, at least it takes a serious minded pirate to undo CSS, and put video in the clear".
To me, this indicates again that the author is not grasping the point. CSS does not take a serious minded pirate to undo. It takes a briefly trained monkey to do a quick google search, download a small program and click a button or two. It does, however, take a savvy person to convert that into a more elegant format than a bunch of ripped VOB files IF top notch quality is a concern. For the average person though, the only thing that matters is getting that 4,5GB mess down to a size that one or two cdroms can hold. And that is quite easy. (most) pirates spens lots of time and take lots of pride in creating perfect rips. An amateur could achieve 90% of the quality of the seasoned ripper with a single click in a simple piece of software.
This means that DVDs do NOT protect their content any better than say an un-DRMed CD or AAC files bought from ITMS. See, it only takes ONE experienced ripper to pirate something. After that, the cat is out of the box for good and nothing can undo it. It doesn't matter to EMI or anyone else if they sell their files locked in obnoxious formats or not, as long as someones able to rip it (that is, convert it to a commonly playable format like xvid video or ogg vorbis audio) they WILL make their way onto the mainstream end-user p2p scene. That scenes' file base is populated not by individual end users sharing the files THEY bought. They share the files that have already been pirated and given to them by, eventually, those above them in the piracy food chain. Theres been an awful lot of speculation on the "cracks" of the new video disc formats. What seems to be missing from most analysis though is that fact of "one ripper - many copies". If a movie is ripped from those formats ONCE, it doesn't matter what security schemes are in place. That movie is forever pirated and while the MPAA could try to stifle the spread of the pirated release, they just can't ever hope to regain complete control of that release. Even if they had a self-destruct device that exploded every legally sold release ever the pirated version would still be there and it would make its way around the world no matter what anyone does. It would make a lot more sense to just do what the pirates does before they get a chance. That means, use the latest and greatest of formats and technology to create files with the best quality per size unit possible while still keeping to established formats such as flac, ogg, xvid, h264, matroska and so forth, and make it availiable for fast download. Unlike the pirates, the industry could charge for those download links.
RIAA and the like can spend eternity hunting noobs on the p2p networks, but they can't and won't catch the people who are way in the background spending their best years ripping music and movies and software, only to give it away for free, with fame and notoriety as the only possible reward (except free leech).
What all of this implies in my opinion is that the record labels and movie studios can either a) continue to try to "stop piracy" in the same manner as before (i.e. very unsuccsessfully) or b) try to compete with the pirated versions for value and exploit the fact that the vast masses of noobs/end-users would actually not mind paying IF the price was fair and the product was good.
If you could chose: spend anything from 30 seconds to eternity hunting that piece of music/film you wanted in perfect quality from p2p networks or torrent trackers, or just pay a relatively small fee (say 20% of what it would cost to buy on a physical media) and get an instant download link. What would you chose? I've been a so-called pirate since I was old enough to read and write. Let me just point out that when the warez scene started out, people were using snail mailed envelopes stuffed with copied floppies and printed or even hand written lists of warez.
The industry can hope to stifle the ease of access for the average music consumer, but for the passionate few who are really the warez type, they have not a prayer. The best advice they could take is to compete with the pirates at their own game rather than try to eradicate them.