I was setting it at an amount that everyone can agree is unreasonable in order to have the discussion.
Set at a lower price, the discussion becomes what is a "reasonable" price. I was explaining the logic of, if something is not worth the price to me, than they're not worse off if I copy it. What is a "reasonable" price varies from person to person and situation to situation, so only serves to distract from the point.
But, you are correct that would you be worse off if nobody finds the price worth it-- that's why the record industry had to change their business model from the old "you have to by 14 bad songs to also get 2 good ones (records/tapes/CDs)" model to the $1/song model, when piracy came a calling. Which, really, was a decent market correction, as they were formally acting in a fairly monopolistic manner. I don't think the entertainment industry is far off that today, especially with all the consolidations that have been occurring.
I have an audible subscription, as it seems like good value to me. If it suddenly doubled in cost and gave me lower bit rate audio files (or, worse, started inserting ads), I'd switch to piracy for books.
It's pretty simple. To be selected over piracy is has to be better than piracy and at the price I value it at or cheaper. If the price is higher than how much I value it, I'll either skip it or pirate it.