there will be those who buy their games and those who steal them.
This is a very important comment that breaks down where I believe the problem lies. I don't think there will always be people who buy games. When game quality goes to a level that is undesirable there will not be people buying software. But there will be people stealing it. It's not a guarantee that when you put a game on the market that people will buy it. Ever.
No product ever gets that guarantee. Regardless if people want to steal it or not, the product must be worth it's asking price for people to spend money on it.
And an overpriced product might as well be a worthless product.
The concept I hear developers trying to hide behind is that if piracy did not exist, then people would be buying the game. The value of the product is not boosted by the absence of theft.
The games need to be better. Plain and simple. It doesn't matter what you do to thwart piracy, it doesn't make your games worth the asking price.
Companies like selling games on consoles because the game doesn't have to be very good to sell. They also love the idea that they can port it to the PC and make a few more bucks but they don't seem to get that this audience can see the real value of the game and won't pay the crazy prices they want. (in most cases, i'm guessing fallout 3 will sell fine)