"This contrasts with the public, which consistently calls for stiffer penalties for digital rights infringement when it's asked."
This particular line really struck me.
The public doesn't know what it wants.
Ask someone who the pirate is and they will tell you it's someone else ... then turn back to their torrent site and download MP3s because... After all they only do it occasionally so where's the harm in that?
This attitude - which is perfectly normal - effectively undermines your statement. The vast majority of people are incapable of seeing the wider picture.
Is widespread copyright infringement an issue? Without a doubt yes especially if you are a small time (yet popular) writer/musician or whatever.
Although the entertainment industry has upped it's game it is STILL lagging behind what the consumer wants. Why is my selection on Netflix different to the US subscriber? Why is it that we still see geographically staggered film distribution? It's all facepalming stuff. Remove those barriers, do the job properly and people will pirate less.
The problem isn't sticks it's carrots. Like it or not.