The scenario is self-perpetuating. One does all that they can to legally protect their intellectual property indeed. However, technology continues to move faster than the law. More importantly there are opportunities being missed by attempting to fight the end user/consumer/fan. Had it not been for bootleggers/illegal file-sharing there are a number of artist who would have never been able to create such a strong street buzz or build a solid fan base. Remember to have music business contracts on hand and access to music attorneys.
Again I point to a situation wherein their are positives to the bootlegging/illegal downloads at least one should attempt to find them. Major record (media) labels aren't investing the type of monies they use to on new releases and artist development. Illegal file-sharing as much as we may not like it is an alternative to mass-marketing music to potential fans without having to invest large sums of money. Think about it this way. As majors and major-indie labels sign more artist to 360 recording contracts there may come a time sooner than you think were the labels say hey "we have this great idea, why not give the music away as a lost leader and make money from all the other revenue streams." After all since they now participate in all the revenue streams it would make sense.
For the record some of the Music Industry Connection Books have been copied page for page and sold to other people without me receiving a dollar. However, some of those same people that got the bootleg version later bought the original, attended a music conference I spoke at and/or became a client that I consultant. No, I don't want people to copy my work and I not get compensated for it. However, there are positives that may come from it. Sometimes these positives come in a residual situation later on.