Copyright infringement was most definitely a thing before then and damages could be awarded even if you had no income from it. See statutory damages. Really the only thing that changed with computers was the ability to make perfect copies, thanks to the data being digital. Prior to that, the problem was somewhat mitigated by the analog nature of it and that by the time you got to the 3rd or 4th generation copy the quality had significantly degraded.
It's not. The problem lies with the way the respondent rephrased the original. The original, as written ("very literally ends up with less money"—not to "very literally take money out", as the respondent chose try to use in a bizarre and underhanded setup), is in perfectly reasonable accord with the correct use of the word "literally"...
As far as "theft" is concerned: software, including recorded music and films, has zero marginal cost of production. The software industries therefore have the potential to generate extreme profits, unrelated to the risks and costs of development. Intellectual Property laws are needed to protect these extreme profits.
Incidentally, I'm not aware that the term "Intellectual Property" was in use before about 1985. Copyright infringement, in particular, wasn't a crime before about that date; enforcement was by civil suit, and if you didn't make any money from infringement, then the court's award couldn't be greater than zero.