The year is 2015 and Columbia has just released Spiderman 7. The next day, 10 million people with no technical savvy at all go to their computers, stick a Blu-ray disc into their DVD drive, log on to Movies4Free (incorporated in the Cayman Islands), and click on the Spiderman icon. Three minutes later they have a 100% perfect DVD, beautifully silkscreened in the drive with the movie logo. They go to their living rooms and start watching.
But the Grokster decision is totally irrelevant to whether this is going to happen. If it's in the Cayman Islands, U.S. law won't apply.
Even more importantly, methods of downloading movies in the future probably won't be incorporated anywhere. Open source applications for accessing P2P networks are becoming increasingly common. And Bit Torrent, which isn't a company or even a network, is currently the easiest way to download content on the Internet (whether legal or illegal).
Call me a utilitarian, but that strikes me as a question of equal important, if not more, than the moral/legal issues surrounding the Grokster. Personally, I think it's obvious that downloading copyrighted content without the owner's permission -- or even more importantly, when the owner objects -- is wrong. I have mixed feelings as to whether operating a P2P company on which most of the activity is trading pirated content should be illegal (and if I did have an opinion I'd keep it to myself since I cover this issue extensively for Variety).
But it is clear to me that piracy will continue largely unabated regardless of what the U.S. government does to try to stop the technology and those who distribute it. Stopping P2P makes the drug war look efficient and effective.
We can punish those caught downloading (or uploading) huge amounts of copyrighted content. We can educate the public so they understand piracy is wrong. And content owners can offer innovative, appealing methods of obtaining their content that make piracy less appealing (a la iTunes and Rhapsody in the music world). In my opinion, those are the only realistic ways to deal with the threat of piracy.
All other discussions are just intellectual masturbation.