HDCP works right now because most people aren't aware of it but when they actually turn on the content protection flags you can bet your ass people will be upset.

Hardly. By that time most computers will have graphics, sound and monitors that support it and a lot of people won't even notice. It will also still be higher quality than DVD, so it's not going to be the end of the world anyway.

Remember how LAN gaming used to work? If I had a copy of Age of Empires 2, I could install the game on every PC on my LAN, and with just one physical disc, play the game with 3 or 4 other people.

If memory serves it had a CD-check on startup, meaning you had to load up the game on a computer, take the disc out, and repeat with each - it was quite a bit of hassle, though it worked.

So I install the game on all the PC's on my LAN, run a cracked .exe for all copies, and use pirated serials to play my legally purchased game over my personal home network. While this is, in the strictest sense, in violation of the EULA, in my view it is in no way whatsoever in violation of "fair use", my own (much more practical) guiding light.

Well, other people are getting enjoyment out of the experience when it hasn't been paid for. I can understand why publishers would insist upon each person having their own copy. It's like owning a single copy of Windows and thinking it's fair to run it on all the computers in the house... it's not fair, even if you did buy the original at full price. Do I think it's immoral, though? No. I did the exact same thing back in the day, though I do things differently now.

But in the narrow view of the developer, if I log in with my legal serial and my kids and/or firends with the pirated serial, then what they see is one legal version and 2 or 3 pirated version. And then they claim a pirated to legal copy ratio of 3 to 1. See how numbers can lie?

They don't lying. In that scenario two-to-three people are using copies of the game they have no right to use. Just because one person in the house owns a copy does not excuse the others.

I maintain that a majority of these people, and perhaps even a vast majority, are not what you could consider "customers" in the real sense of the word; that is, they would not have bought the game had piracy not been an option. They would have more likely just not played it.

I don't think you're necessarily wrong. It's also possible many of those pirated copies could generate legitimate sales or be from people that have lost/damaged their disc. However, there is definitely a large group of people that pirate games because it is convenient and that would have otherwise bought it. Also, even if those people wouldn't have otherwise bought the game that doesn't give them the right to get enjoyment from it. If you can't afford a Mercedes then you don't have any right to drive one - the only difference with the digital world is that you're not depriving someone of it, though that's not a justification to condone it.

At the end of the day I believe the statement in the article is accurate - the rampant piracy on PC will reduce the number of sales, whether on console or PC. It's about making money and if they can delay the PC release by a few months and make more money because of it then they'd be silly not to. If PC gamers, like ourselves, want to change that then we need to support a reduction in piracy. Clearly DRM is NOT the answer but we need to find what is. Personally I think the closest solution that is consumer friendly would be increased DRM with digital distribution, as long as it reduces piracy and doesn't limit legitimate use - the activation limits of present are unacceptable.