I think the argumentation is going off the road here.
Blizzard didn't sell to any major publisher at the time (which was almost 20 years ago) and THQ have no one but themselves to blame for where they're at.
I don't like piracy, I think it's anti-social behaviour, with dubious justifications. Personally I'd love to see an open source world, and that would be a beautiful thing, but I also feel like you have to live within the world you have, not the one you want. In the one we have, intellectual property is basis for business, and of course nobody is doing anybody any favors by undermining that.
The argument here though, is whether it's ruining peoples ability to do business. I simply don't see any evidence of that. It's worth considering the fact that the impending doom of the publishing industry has been foretold ever since the early 90's, if not sooner.
I don't know anyone who owned more legitimate copies of games, than they did pirated floppydiscs back in the 90's. At least today I know people who are pretty serious about only buying legitimate copies on places like Steam.
And that's reflected in how these businesses are doing.
It doesn't have a lot to do with what developers are doing, which is pretty much the same they've been doing ever since the post-Atari era, where developers became free to do what they wanted.
If you want to see something interesting, check out EA's annual earnings report for 2010. Aside from the usual revenue and percentages, they also list the number of titles for each platform.
Guess which one is the most profitable for EA - The PC. If piracy is really a threat to their survival, then it's pretty weird that the PC would be making more than either of the DRM machines per release.
And given that EA have lost 4% of their PC revenue over the last 3 years, and Activision has doubled theirs (not counting MMOs) I really don't see a basis to say that releasing games on the PC is anything but great business for publishers.