> Well, what is the recourse for legitimate businesses then? When pirates can set up shop and distribute content that is expensive to produce, how do these businesses evolve to a more flexible model when an unknown large chunk of their rightful proceeds are directed elsewhere?

I think this falls under argument from lack of imagination. Overreach shouldn't be justified because we haven't yet figured out how to solve the problem. I still lock my car and house. I invest in that security because it is important to me. I think they could invest in their own solutions to solve some of those problems without gov't interference.