Cory Docterow summarizes the issue:
Clip a Dilbert cartoon and stick it on your office door and you're not violating copyright. Take a picture of your office door and put it on your homepage so that the same co-workers can see it, and you've violated copyright law, and since copyright law treats copying as such a rarified activity, it assesses penalties that run to the hundreds of thousands of dollars for each act of infringement.
It's not that artists don't deserve payment; they do. The problem is that technology has run past the way the law was designed. Copyright law was designed for a time when it was expensive (and relatively difficult) to create copies - and very difficult to create lots of copies. Now? It's not only easy, it's something we can do without thinking about it. 
Somehow, the law has to be brought into line with reality. I'm not sure what the answer is, but what the MPAA and RIAA have been trying to do is decidely not the answer - large scale suing of ordinary people "to send a message" just ticks people off, and doesn't solve the problem. DRM is too easy to get around, so it's not the answer. As Docterow argues, there needs to be some level of differentiation (legally) between small scale sharing and industrial scale copying. If a friend sends me a few mp3 files, that shouldn't be a criminal offense. If a corporate entity makes thousands of copies of a DVD and sells them for cut rate prices, that should be. 
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