More people write books. (as will be more money in it)
World 1.1 Pays your bills. Doesn't make you rich.
More crappy books. More high quality books.
World 1.2 Can make you rich.
Many people will write purely for financial reasons. Some people will be doubly motivated - financial and professional success. They can focus solely on their area of interest, and creating content for it knowing they can also achieve financial success with it. More books written by companies. More crappy books. More high quality books.
World 2: Not one person on earth pays. Every single book has to be for free.
The fewest books produced. Hobbyists or retired people only. People will write for passion. Not necessarily the most qualified people.
World 3: Somewhere in between (our world)
In-between.
Look at youtube which is close to world 1.2. There certainly is a TON of crappy content. However, there's also very high quality, professionally produced content in there. No financial incentive means few of those high quality ones would be there.
Guessing certain types of readers are more likely to pirate than others. The reality you're describing is one in which pirating readers have fewer books written for them. As someone who doesn't pirate books, I'm reluctantly fine with that. My authors will get compensated and write. Others' authors will find something else to do; they can make podcasts or whatever.