Cost is an issue, although I wonder how many people pirate movies ans shows because it's "really" too expensive for them. If you want to watch the movies you want, and you're not so rich, it certainly is going to cost you more than a netflix account, but I don't think everyone is doing it because of the cost, they also do it because it's easier. It's hard to beat the torrent catalog.

Also if you enter the argument of entertainment being a luxury, and that a DVD should cost around $15, you will have people pirating because they certainly don't want to spend so much for watching a movie at home. There will be people arguing over the holywood money machine and how much a movie really is worth.