Frankly, I don't think that piracy will ever be totally eradicated, but what you have to realize is that people who pirate games and movies oftentimes do it because they really can't afford to buy what they pirate. Musicians and moviemakers are wah-wah'ing and saying "LOOK 100,000 PEOPLE PIRATED THIS MOVIE/SONG, IF THEY HADN'T DONE THAT, THEN WE WOULD HAVE HAD MORE PROFIT"- wrong. I guarantee you that at least 90% of piraters couldn't be bothered to go pay money to watch a movie or buy a game if they can't get it for free. If they could afford it, they wouldn't have to pirate, yeah?
Not that I'm defending pirating- stealing is wrong etc, but let's be real, there's a fair amount of people on this site who have pirated movies, games, and most commonly, music, to avoid paying money- because they didn't have any money to pay with. Pirating only causes a loss of profit when people who would usually pay money don't, and most of the time, that's simply not the case.
Also; no matter how much you try to emulate the experience of a movie theater at home, it'll never be quite the same as actually going to the theater. You can get the same surround sound and the same picture quality and even buy a popcorn machine and soda fountain, but you'll never quite be able to match the atmosphere and general feel of a theater. I think that's why a lot of people still do go to the movies as opposed to staying at home and watching movies on their HDTV.