The analogy breaks down because music and other forms of media are just pure information, so there is no reason to buy it if you already downloaded it, especially as the friction of obtaining an illegal copy is reduced to zero.
1. Many downloaders ended up buying physical copies because paper books are easier to use.
2. It drove up sales of older catalog items, which had been crowded out of the shelves at physical bookstores.
3. It created new fans of the authors, driving up future book sales.
You can read about it at http://www.baen.com/library/
Why? Because I found it was a useful book and wanted to support the author and own a physical copy. I also would have never purchased the book if I hadn't been able to go through it first online.
I realize that I wasn't pirating - but the analogy doesn't break down in the manner you suggest.
That's a donation, not a purchase.
If I download a song - it does not directly negatively impact the artist. They aren't out anything.
The indirect impact on the artist is another matter. They are potentially out of a sale that could have otherwise happened without the piracy. However, they are also potentially gaining a sale from a user who would have not normally purchased their music, but downloaded and decided to buy. Just like listening to a song on the radio isn't theft - yet if you are only listening to the radio and not buying music are you stealing?
It most certainly should not carry harsher penalties than physical theft. Downloading a song should not result in a 1000$ penalty while a physical theft of a CD results in a lesser penalty.