yeah, you actually can't do this. these people never entered into an agreement with you!
Yes they did? When you buy a product you implicitly agree to certain common law rules regarding that product - in this case, rules around intellectual property. You can't walk into a restaurant, order a nice meal, eat it, and then say "hey I never signed a contract that said I would pay for this meal".
Not only that, a lot of the time it is explicitly specified - load up a (non-pirated) DVD and the first minute of your time will be spent being reminded of basic copyright law and penalties for breaking it.
That is not how it works. If I write something, hand you a copy and tell you "there you go, it's yours", you can't copy it, even though I never explicitly told you anything. When you buy an album or a movie, there is no explicit agreement that you cannot copy it. You sign nothing, you do not click on "I agree", there is no verbal agreement of any sort, everything is completely implicit. When I am about to take a copy of your work, I do not necessarily know who holds the actual copyright (is it you? the record company? which record company?), nor do I know what they have to say about it (in fact, they don't even have to say anything). There is nothing "explicit" about copyright.
See my response to UD.
But that is the whole point, I shouldn't inherently know why copying your music and distributing it without your permission is wrong, because it is not clear cut whether it is reasonable for you to have this right or not.
You should, actually, and you probably do. Humans have an intuitive grasp of intellectual property, and you can see this all over the internet. If someone uploads a home-made video to youtube which becomes very popular and another party re-uploads it, you will have tons of commentators state "hey you stole this video from x!" even if, by your logic, it is "harmless duplication". And the reason we have an intuitive grasp of intellectual property is because of the same reason we have an intuitive grasp of physical property: it is a representation of a person's effort and we as a society deem that people should be able to profit from the fruits of their labor. This is why IP deserves some (though not all) the protections extended to physical property.
Imagine that we removed copyright and replaced it by the requirement that X% of any profit made from the sale of an item must be distributed among the original creators (if the item is given for free, X% of 0 is 0). Any digital good would then be downloadable for free, and anybody could distribute anything as long as profits, including of course ad revenue, are properly distributed. In theory, that would be a fair system. Pirates would still be doing exactly what they have been doing until now, but it wouldn't be "wrong".
This would not be a fair system. This would be like someone saying "okay, anyone can sleep in your house, but if they run a business out of it they have to pay you a percent of profits" - the fact that your property is still being used without your consent doesn't change.
That said, an entity can release its product under GPL or CC and essentially do exactly what you just described above...but it would have be to that entity's choice.
Surely you can see that I am questioning the existence of the right itself. Copyright is unsustainable. [...] Similarly, if you think nobody has a right to live, you would probably not see murder as being "wrong", but the difference between the two is that there are reasonable arguments against copyright (i.e. the fact that it is systemically violated, impossible to enforce, abused by corporations at the expense of creators, a hindrance to derivative works, and that alternatives are conceivable).
You are free to question the existence of IP law, and in fact everyone should certainly question the existence of IP law as it stands right now because it really sucks, for some reasons you mention in this post and more. However, I would not want to live in a society without intellectual property, because I am aware of the economic consequences. IP law is the only reason companies invest in highly expensive R&D - if you spend several billion dollars developing cutting edge software and then Wal-Mart could sell the same thing for the cost of printing it on a CD, what's the point? And even if you consider a system where the profit would have to be split, what about all the users that would simply download it for free? You get no return on your investment, so there's no reason to make an investment. A large sector of our economy simply breaks down without IP law or some comparable structure.
A broken system leads to broken behavior. No matter what you say about it, piracy is here to stay and as a distribution system, it is head and shoulders above everything else. The solution to piracy is not "it is wrong, therefore don't do it" - it is "it is unstoppable, therefore make it right". You should view my argument not as a justification of piracy, but more as an observation that piracy won't be wrong forever. The transition to it being a fully acceptable behavior has already started and is only hindered by how sluggish the system is at adapting to it.
While I agree with your analysis, I do not agree with your underlying logic. All crimes are "unstoppable" and "unenforceable", from a certain point of view. We cannot prevent all murders, rapes, or thefts (of physical property). That does not mean we should change our legal structure to make those actions okay. Piracy should still be illegal, because it is essentially theft. Prosecution of pirates, however, should go way down - IP records are simply not enough evidence, and as it is the music/film industry's way of dealing with pirates borders on extortion. That said, yes, piracy is more or less unstoppable if we want to maintain even a modicum of due process in our legal system.
In my opinion, one of two things will happen within the next decade:
1) We will increasingly lean towards digital distribution models, which will begin to compete with the most common medium of piracy (torrents). It is obviously impossible to beat torrents on price, so companies will have to think of others ways. One of the ways we're seeing is post-sales support. The videogame industry has embraced this in the form of frequent DLC or free updates, and it works very well at deterring pirates (who have to scramble to avoid the updates, lest it render their cracked copy invalid) while actually benefiting paying customers. This way, the company only needs to authenticate the product infrequently (and it can be slipped into the process of updating) and pirates can still pirate, they'll just be getting an incomplete product and have to go through a lot more hassle.
This system is also open for abuse (lol activision) but it's a hell of a lot better than DRM. And while there will always be pirates who manage to find ways around any system, the idea is that this will reduce the convenience factor by enough that they'll just fork over the money.
2) The entertainment industries continue to be subsidized by customers who actually buy their products and pirates continue to run rampant until eventually everyone's freedom on the internet is sharply curtailed by a series of corporate-written laws that impose vast restrictions on the web. Because make no mistake...if business cannot reconcile piracy with their business model, they will not hesitate to pull the strings on their puppets in Washington. This will obviously be very bad for all of us, so I'm hoping we manage to figure out a solution before it inevitably happens. You could say "but our system is so corrupt and it's all due to IP law" but, really, it's due to corporatism, which isn't something we can fix at this point in the game.