You are implying that the price drops in the music industry are caused by less piracy? Every release of every band that someone wants, someone can get for free by pirating it. That has not changed. It has not gotten harder either.
Sorry, you're getting a bit confused. The music software industry specialises in recording software (like Cubase, Sonar, Logic) and virtual instruments (multi-gigabyte virtual instruments that gives a realistic sound through MIDI programming). The price of Cubase (protected by Syncrosoft) has fallen considerably, as have the price of virtual instruments from East West and others protected by iLok. Several years ago there was rampant piracy but now that has ceased (the latest versions of Cubase haven't been pirated, despite being available for 2yrs). There is a definite benefit to the legitimate user here.
I guess you missed the part where the PC is an open platform and that this is impossible in the first place.
Impossible to mandate? Sure. However, if there is a benefit for the consumer then it becomes desirable. Nobody forced monitors to support HDCP but now they virtually all do, so we're not talking about anything far-fetched here. TPM chips are already used in laptops for use with Vista's Bitlocker feature.
If you require some sort of hardware chip to check to ensure its running signed code only then someone will simply emulate those functions.
Just like people emulate the iLok? Oh wait, they can't. The advantage with these hardware chips is that the routing can be edited and render any crack void, should one ever be made (seemingly unlikely but not impossible).
Which is exactly why it would never work on the PC. People will not tolerate having something tell them they can't watch a movie, piece of music or play a game.
HDCP. 'nuff said.
Hardware dongles work for niche markets only
Well, lots of businesses disagree and the TPM has got plenty of support, even if it has been very slow off the ground. Will it work? I don't know. The sheer scale of the industry might mean it's cracked in weeks but the potential for it working is there, whereas it simply isn't when it comes to DRM.
All I know is consumers are getting fucked over with delayed ports, limited activations, CD-checks and the like. If a hardware solution can eliminate piracy like it has for the music software industry then it should be strongly considered, as it will benefit consumers.
"The price of freedom is eternal vigilance."