Anecdotally, most of the people I know who fileshare just consume more now than they did, in a wider variety. Some of them have stopped buying stuff, but most of them haven't, and many went to Hulu, iTunes, Grooveshark, Pandora, etc. as soon as those became a good enough alternative.

You don't need to prevent it completely, that's putting your eyes on the wrong goal (though this seems to be the tack that they're taking). You just need to make the alternative as easy or easier and inexpensive enough to not think too much about if you're moderately well off. It's a stupid company that tries to force their market to act in the way they want it to, rather than finding a way to cater to them.

How?

You are taking a more cautious view than me, which is maybe more prudent and respectable. But I would be interested to hear how copying can be intrinsically harmful . . . the basic problem is that it is by definition physically separate, so for there to be any effect communicated at all requires some other system. Is there a good counter-argument or -example?

Would it be immoral to do something 'to' someone, when it has no effect on them at all? Hmmm, that seems rather difficult to find any immorality in -- after all, any moral concern must eventually bottom out on some actual effect -- deontological or consequentialist.

If all that can be said is that it would be 'spiritually' wrong or 'god' decrees it to be wrong, or merely that 'we' have decided it is wrong, that is unlikely to satisfy anyone rational.

It's not nitpicking to separate theft from copyright infringement - they have very different effects on the owner, and to conflate the two is basically spreading FUD to confuse the argument. They should not be treated the same way by the law, despite what the rightsholders might like.