First of all, the extreme arguments on both sides are effin stupid.
On the one hand you have people out there who seem to think that you CAN stop torrents and file sharing and other types of unregulated distribution of information based products. You can't stop it. It will always happen.
One the other hand you have people who seem to think that because you CANNOT stop it, that makes it ok and that everyone should develop business models around piracy and file sharing being the norm. This is even more stupid. Keep it a crime and an action that society at large considers morally wrong and you automatically are controlling the problem because huge numbers of people will not do it. If you pursue penalties where it makes sense to do so and will not drive you broke, than go for it. If not than thats ok too. The mere status as a crime is enough to control it to an extent.
Now all that said, I agree with Gordon that the Freemium model is the only one that really works for web based business today. There are however two versions of this. The first basically gives the stuff away and hopes that 10-20% will want to buy the same thing in some form. For example, I give the PDF away and maybe 10%-20% buy the book. There are now a handful of famous authors who have done this and champion the model. The problem is that the model really only works for famous authors who will have tens of thousands of readers. The model does NOT work for lesser known authors, who still largely need to build credibility by selling books through traditional publishers.
The other model is the one that I use. A large amount of info is offered for free (in my case the blog, and articles, and such) as well as some things that are very inexpensive and which I do not make a lot of money on ( my books). The hope is that 10-20% will like it enough to buy the PREMIUM material such as the course or attend classes that I do make decent money on. This is the Freemium model that WILL work for people who are not famous.
At this moment, my books are torrented and on rapid share. I did not put them there and I do not approve of it, but I am also not getting all upset about it either. It gets the meme out there and is basically advertising. There is after all the chance that one of those people will buy the course or come to a workshop.
Now, if I see the course material up on a Torrent site, I am going to be seriously put out and take whatever action I can against those who post it. It is how I make a good amount of my income. If the premium stuff gets up on torrent sites and detracts in serious numbers from people paying for the course, that makes it not worthwhile to even bother with the course at all. So far, no one has, to my knowledge done this.
This brings me to yet another level of this discussion, and to a character that is the true Pirate - the guy that steals the work of another, reproduces it himself and makes himself a profit. I got word today that "The Sorcerers Secrets", along with Frater R.O.'s books, were being sold in spiral bound editions at a Pagan Pride Day in Mass. This person is a total scumbag and deserves what is coming.