Your points about usage of TPB, less convenience, lower quality, cost being low enough - all of them seem to be from the U.S. or first world perspective. In many other countries, TPB or equivalent is very common across classes of people (not just students but also workers in different non-technology industries). Unauthorized copies are more convenient because most people watch media on a tiny laptop or a small monitor desktop (often several years old or low end), where a free VLC or other player will play whatever is thrown at it. Quality of the video/audio isn't a big deal on these lower end, smaller screen and older devices (plus, many people may prefer lower quality for the lower data consumed from a broadband connection).

One might argue that these people would never pay for content and so mustn't be considered when talking about paid content. But given a chance not to jump through hoops and with geography specific pricing, there are ways to get people to pay. That could add up when done right on a large population base. Right now the big content houses are literally leaving money on the table and encouraging piracy (to put it in a different way)!