This confusion is exactly why "piracy" was used as a marketing term by the MPAA & friends.

It seems pretty obvious. Piracy is a synonym for particular sort of theft, but one that paints a very vivid picture of the person doing it as an outcast and a danger. If they had, for example, used the term 'digital shoplifting', which in the case of P2P is pretty close to reality, people would have brought their preconceived notions about the term which many associate more with teenage stupidity rather than hardened criminality.

Other synonyms for theft (larceny, burglary, robbery, etc) are too tied to the physical world to work for their purposes. The goal was to frame the conversation away from more accurate words like copying or infringement since those have more ambiguous moral connotations. Looking at the thesaurus entry for theft, I struggle to find a better alternative to piracy if the goal is to shape the way people think about the issue in your favor.

I think people have the intellectual capacity to learn newer and subtle definitions for words. Give them some credit.

I think the reaction had more to do with the intended negative connotations of a word being perpetuated by people trying to justify their existence.

I'd prefer we call them huggers, not pirates, and that they are hugging content rather than pirating content.

You'll notice that if the word has positive connotations, then if you commission a study on the effects of hugging on the music industry, you'd probably be expecting to finding positive net benefits to the activity.