I think the government should stay the heck out of commercial business issues. I understand that pirating may be a form of stealing however the system that is setup now is also a form of stealing. (example) if goto a movie that was not worth (IMO) the 15$ i pay to watch it. Who do I talk to about a refund? If you buy a game that is horrible or totally lack the luster the box says it has. Who do i talk to? The way the system that is setup now is they offer you something and till you spend the money on it you don't know you if you bought shit or gold.
The problem with your statement is that art (which is what movies used to be) is subjective. While you're pissed that you spent $15 to see a movie you didn't like, there's someone who is glad they spent $15.
I think the issue here is the fact that these websites have replaced the alleyway hustlers of the late 80's/early 90's selling bootleg tapes and VHS movies. At least, that's how law enforcement see them. While some of us actually own the content we're downloading, many do not. It isn't illegal (not yet at least) to make a back-up copy of a CD or DVD for PERSONAL use. You can make a hundred if you like, just as long as you don't give one of those copies to someone else. A big argument to this is "I bought the CD, I can do what I want with it!" And that's true, you did buy the CD. But what you didn't buy is a license to reproduce or use (in your own work) the content that is ON the CD. The big problem is that the copyright laws that are in place were originally designed before digital media. The DMCA was the first attempt to handle this, but our government was shortsighted and didn't think it would ever become what it has today. So, instead of listening to the people who purchase music and movies, they listened to the RIAA/MPAA.
I'm for copyright laws, because they protect my content that I, as a creator, make. I also believe that once content enters the public domain, it should be freely available to the masses after 10 years. Artists (and the companies that produce their work) have a right to profit off of their work, but not indefinitely. Art is created as an expression of one's inner self, and it is displayed and admired for and by the enjoyment of the masses. An artists true goal shouldn't necessarily be to make the most money, but to have an impact on the lives of others.
Back to the topic at hand. The government is stepping in to enforce the laws that they created, however shortsighted they may be. Are they within their right to do so? Yes. Are they within their right to pursue individuals in other countries? Depends on the treaties and agreements in place. Are they going about this the completely wrong way? Yes.