Things are rarely straightforward on one side or the other.I agree at first sight it does seem a somewhat draconian way of tackling the problem,but the music business is after all just that, a business and like any business it needs to make money to grow.After all you wouldn't walk into a shoe shop and help yourself to a pair of shoes without paying just because you took a fancy to them. Buying a track from a sight like i-tunes for example costs a few pence, if you dont want to pay that tou clearly dont want the music that badly. If you want a constantly evolving music scene with a plethora of genres and styles you have to be prepared to pay for it or you could end up with a music scene solely of the more commercial bland pop acts.
O.K thats the case for, on the other side the internet has been responsible for launching the careers of many artsists who have gone on to commercial success and brings to the attention of many types of music and acts not normally seen on mainstream media and this in itself helps the music industry to grow. The bands and record companies could I'm sure make their money back from live music and concerts and maybe the music scene as a whole would be better with bands going out on the road more.
There is also the matter of enforcement, as I understand it (and I may be wrong) it is up to the record companies to determine which computers have downloaded files presumably by monitoring traffic at illegal download sites.They then force the ISP to write to the person paying for that account telling them to stop if they do not after 2 letters their internet speed will then be severly restricted and then cut off. In the days of wi-fi and people hacking into your broadband service by sitting outside your house with a lap top you may not even ba aware that your computer is being used which brings questions about burden of proof into play.
From a personal perspective there is no doubt that the internet has been responsible for leading me to new bands I would otherwise not have encountered, but utimately I prefer to have an actual CD with all the artwork and band info, lyrics etc. But thats just my personal preference and after all in terms of High Street stores for any real choice of artists there is HMV and ...well thats it really.