how do you know how much is fair?
The problem is: what is a fair price? How does the user know what is fair? I mean yes, the development cost is the same when selling 100 million copies or selling 1 copy, but how do you know how much we sell? Did anybody bother to calculate how much it would cost to develop that software? Did anybody ever think that for each sale made there is a cost in support and in the sale it's self? Sometimes up to 50% goes to the person/company that sold the product, not to the one that made it. Did you know that? Does that go into your fair price too?
I have a software company in Eastern Europe (where price are considered to be small and everybody outsources). A programmer costs about 3000$ a month with salary/taxes/social security. Developing a small application (like dentist office management tool) needs a few months and a team of a few people to develop. For a 6 month of work and 4 programmers we already have 72000$ just in development costs.
Now what is a fair price for the application? What do you think is fair? 200$? Noooo....you'll scream....windows does more and costs less. Unfair! Lets steal it instead. Well it's all about volume. My case there is a small target audience, reached hard. We are not expected to sell millions of copies. In fact in order to break even (and not make any profit at all) we are going to need to sell 360 copies at 200$. But oh wait: the application doesn't sell it's self so put some marketing in it. Selling 360 copies requires finding 360 doctors and convincing them to pay 200$ (if they think it's fair), and don't already use another app. For each sold application you'll have a cost in marketing. Then you realize that with the cost of sale you need to sell about 500 copies to break even.
You sell your 500 copies and you notice that your phones are ringing all the time. There are 500 users that need support. You hire some support people to answer the phone and assign a developer or 2 permanently on dealing with bugs and issues, and offering patches to customers. Just supporting your small application costs about 10000$ a month.
In the end you realize you can't sell more then 500 copies because there aren't enough dentists around you that need it. Most of them already use a competitor product (or if your product is truly good - most of them will use a pirated copy of your product) or some simply use Excel (most likely pirated). Your own pirated copies become your competitor. You can't sell because they already have it for free.
Now the above is just hypothetical. It's just an example. We sell a different kind of application with a different (unfair) price. The hard truth is in our case that we know there are about 3 times more copies in use then we sold (we have some callbacks in the app). We are at the point where we haven't even broken even yet and I think it's unlikely to. We are about to discontinue the application ironically not because it isn't needed or used but because of people steal it instead of buying it.
As for difference between piracy and theft: is there any? If you shoplift a dvd/cd with my software from the store or download it from a torrent do you think it makes any difference for me? The dvd it's self only costed 50 cents. I don't even care about it. The real value was the software in wich I invested possibly hundreds of thousands of dollars. Why is it any different that you go shoplifting for software in a store or download from torrents? From my perspective the difference is 50 cents. Why does somebody go to jail for this 50 cent difference if he steals from the shop around the corner and just a file (perhaps) if he downloads it? I don't get it. I go out of business anyway....