The music I download are directly from the artists' website for free (.mp3), not some protected file type that you can only toss on your iPod. They don't care about the money or fame, they care about spreading the word and giving a message.
$1 a song is quite expensive. If I was to add up all the songs I have, that would cost me around $5,000, maybe plus tax? My sister isn't even 14 years old yet and she already downloads off youtube and imeem. If it's there, and Firefox's addon lets me download it, I don't see how it can be illegal.
I am hoping you mean piracy by other things too (programs, games, movies, etc) because I don't see this can only apply to music. The music industry looks fine right now because there will always be a majority who pays for music and others who don't. Same for Windows (like someone said) and same for Photoshop.