The notion that statutory damages were intended to exceed actual damages by such an unreasonable factor on purpose (hundreds to hundreds of thousands, when the standard for punitive damages is 3) rather than the ridiculous result of applying a law written with one circumstance in mind to an entirely different circumstance.
> A person retains a single copy for himself. However he does indeed actively participate in the creation of many other copies (potentially hundreds of thousands as you say).
Many of the early P2P networks (and some of the current ones, especially for small to medium files) don't have more than one user participating in any given transfer. If you wanted to download something on Napster it would connect to one other person and download the entire file from them, with no other users being involved.
That is also what happens in practice in modern day even for the networks that try to download different parts of the same file from different people, because connections are now fast enough that as soon as you connect to one peer, you have the whole file. A 3MB MP3 transfers in ~30ms on a gigabit connection, meanwhile the round trip latency to a peer in another city is typically something like 100ms (even for fast connections, because latency is bounded by the speed of light). So it's common to connect to one peer and have the entire file before you can even complete a handshake with a second one, and rather implausible for a file of that size to involve more than a single digit number of peers. Hundreds of thousands would be fully preposterous. And then we're back to, the number of uploads divided by the number of users is ~1, so if the average transfer involves, say, four peers, the number of uploads the average peer will have participated in for that file will also be four. Not hundreds, much less hundreds of thousands.
Meanwhile you're back to the problem where splitting the files should be splitting the liability. If four people each upload 25% of one file to each of four other people, the total number of copies is four, not sixteen. If you want to pin all four on the first person then also pinning all four on the second person is double dipping.