As I said before, copying a file doesn't deprive anyone of anything
except a theoretical future purchase. Look at your example: “If you
share a song that someone would have bought…” How could anyone
possibly know whether that person would have bought the song, unless I
share the file with them in the actual record store, while they are on
their way to the cash register?

If copyright infringement were theft, then it would be part of the
criminal code, but it isn't — it has its own special law, because
it's something different. And while it's true that there are financial
damages involved with music downloading and software piracy, that
doesn't make it theft. It's an improper use of something over which
someone has certain rights. But they are not the same as property
rights, no matter how much you would like them to be the same.

But on the theft part, you are just wrong. Nowhere, in any dictionary that I can find, is theft defined as “only physical goods” . Business 101 teaches of opportunity costs and that is exactly what is being stolen in file sharing.

If you share a song that someone would have bought if they hadn’t gotten it for free from you, you are then stealing that money from the rightful copyright holder. This is black letter law. Software Piracy is a crime in every civilized nation in the world but if your definition it were correct it wouldn’t be.

Finally the conclusion of the Supreme Court case you cite is incorrect. Dowling vs the United States did not say that copyright infringement wasn’t theft it said that the result of copyright infringement didn’t create stolen property as defined by the interstate transportation statute. If you go to Wikipedia you can find the relevant passage where Judge Blackmun says

“The section's language clearly contemplates a physical identity between the items unlawfully obtained and those eventually transported, and hence some prior physical taking of the subject goods. Since the statutorily defined property rights of a copyright holder have a character distinct from the possessory interest of the owner of simple “goods, wares, [or] merchandise,” interference with copyright does not easily equate with theft, conversion, or fraud”

So he is clearly referring to one individual statute and the language within that statute not the ideal of legal theft as a whole. He even says “The Section’s language” pointing out that he is specifically talking about that statute.

Theft refers specifically to physical goods — since stealing an
actual physical item from you deprives you of the use of that item.
Copying a song deprives no one of anything except a purely theoretical
sale, which might never have occurred in any case — and that's why
the Supreme Court has specifcally said that it isn't theft. It's
copyright infringement, which is something completely different.
Copyright is a balance between the rights of the creator of the
content and the benefit that society as a whole derives from that
content, and it is a constantly shifting target.

As for those articles about file sharing decreasing, those are
inconclusive at best, and in any case they are from three years ago –
surely you can't be arguing that it has been declining since then?
Grokster and Kazaa and others may have declined or been shut down, but
new ones have taken their place — for example, BitTorrent has been
climbing in usage at an almost exponential rate, and now makes up a
substantial portion of all net traffic.

The radio analogy isn't perfect by any means — my point was that the
record industry opposed the compulsory license given to the radio
industry just as it has been opposing file-sharing, and it has made
far more money from radio airplay than it ever could have without it.
I think it would be in the industry's interests to find ways of
working with new technology instead of suing its own customers.

On morality, I don’t understand where you are coming from here. A business created a product and you have to pay them for that product. If you get that product without paying them for it that’s stealing, it’s the definition of stealing (which is literally to take without the owner’s consent)

Now there is righteous crime and you could say there is some higher cause that negates the theft such as during the Boston Tea Party. In the Boston tea party the tea was stolen but the cause of a free nation superseded that principle in most people’s minds. But it was still theft (and I don’t know where the higher cause would be here)

On an illegal file sharing rise here are some articles from when the lawsuits began that say illegal file sharing (at least of music) at least was decreasing.

http://media.www.californiaaggie.com/media/stor...

http://www.digitalspy.co.uk/broadcasting/a26272...

To the best of my knowledge the only organization that has claimed otherwise is BigChampagne which no one in the industry seems to take seriously. I mean, ask yourself this, the RIAA has been suing for almost half a decade now…more than enough time to get a sample of how effective the method is. Now, if it was making no difference whatsoever, why would the music industry keep doing it? It’s bad PR as it is so it would make no sense from their perspective. Further BigChampagne’s claim that there has been a steady uninterrupted rise in p2p sharing doesn’t make sense in light of all the illegal trading networks that have been shut down (which should have caused some kind of dip, at least temporarily). Grokster alone had 9 million users which should have made at least a dent.

Finally, I don’t see how you can say radio is fundamentally the same as file sharing. You can’t play songs on the radio at your own times, you can’t duplicate the packaged product with radio, you have to listen to commercials on the radio. I honestly can’t think of one fundamental way in which they are the same to be honest with you. Anyway, even if they were, I don’t think saying “they should be able to figure out a way” is a business model and if you can’t suggest a way for them to continue making money I don’t see how you can say they are wrong to protect themselves against file sharing.

Again, I don’t know (boy this turned out long…). Maybe I’m missing something here but it just seems like you’re using vague proclamations (“they should be able to figure something out”) and odd twists of logic (the labels are still suing even though its had no impact) to make what you want to believe seem as if it makes sense. I could be missing something here but for the life of me I just don’t see it.

As for being ineffective, I'm not sure which studies you're talking
about, but as far as I know file-sharing activity has continued to
climb in a virtually unbroken upward curve over the past several
years. In addition, there are also several studies that show music
sales have increased as a result of file-sharing, and that
file-sharers in general buy more music.

When it comes to the last question, let me answer it with a question:
How does the record industry make money from radio? By selling
everything related to the song — packaging, concerts, merchandise,
branded experience, etc. I don't think file-sharing is different from
radio in any really fundamental way, and if the industry managed to
make radio work then it should be able to make downloading work.