I can't really comment on the technicalities of Internet piracy, but I can comment on the morals of it. For me personally, I have no problem paying for something that I think is reasonably priced. I have no problem paying for Netflix to get movies, because I think it's a good deal and worth it. I have no problem paying for iPhone apps that I want because I feel they too, for the most part, are worth the asking price.
There are several things though that I think are utterly ridiculous. Music, for one, is stupid expensive and I only pay for it if I can't find it for free. I'd be totally cool with paying like $15 a month and getting to download (not just stream) all the music I want and be able to put it on all my iDevices. But $10-$15 an album and $1.26 a song just can't compete with free.
Movies, also are stupid expensive to buy. I say a DVD at the store the other for $20. WTF? Seriously? Rentals are even to expensive. So I get Netflix and I rip the films I want. I might pay like $10 for a blu-ray or iTunes HD download.
Same for tv shows. I only watch a few things so cable/satellite is a rip off. 99 cent rentals are acceptable for hour long weekly shows but not sitcoms and not nightly shows like the Daily Show and stuff. It's just too much money.
And I never feel bad when I get stuff for free. I feel entertainers and the execs are way way way way way overpaid, and they value themselves too highly, and that is why all this crap costs so much. Most of these people make more money then they know what to do with and it's absurd. Utterly absurd. If actors, musicians, execs, and whoever else, weren't all so greedy and didn't have such inflated egos, then we could all just get this ENTERTAINMENT for a much more reasonable price. I mean, some actors get $20 million dollars a movie....what can you possibly need that much money for in your entire life? And WHAT could possibly make you think you deserve that much? You're a freakin' actor....
So, no, I don't feel it's wrong at all that people pirate.