I agree, should an artist want to protect their copyrighted material, let them do it. The problem is that all of the available avenues don't work or alienate fans. The best way to fight piracy, as Starmongoose pointed out, is to give your fans a reason to purchase your album.
A large part of the problem is that the old business model, which the record industry is still based on, does not work. Since the 1920s, a group/artist would record a song (later in the 60s, an album), and the record company would distribute it to radio stations and hope it would encourage sales. However, between the Great Depression and World War II, it was only the wealthy who could afford luxury items like 78s. Almost everybody had a radio though, and used that as their source of entertainment.
All that money, glamor, and stardom we associate with the music industry didn't actually come around until the 1960s. The reasons the music industry exploded are a combination of the post-war economic boom, the counter-culture, and the birth of the album as a cohesive concept.
Since then, artists and record companies have been trying to replicate that success. While there are many factors, one of the biggest reasons why it hasn't happened is the ridiculous overhead it takes to launch an artist's career. The cost of promoting a single nationally is estimated at $1,000,000. The standard advance on a record contract is $125,000. That's all money the artist needs to pay back. On record sales alone, an artist would need to sell 250,000 copies of their album to break even. The overwhelming majority of artists don't.
The independent scene is a lot different. The artist receives no advance, but split the costs of recording the album with their label. Some promotion is done, but they rely heavily on word of mouth and the college music scene. If an artist at this level sells 10,000 copies of an album, they actually make more money than an artist on a major label who sells 200,000 copies.