A couple of problems:
1. It's not like this is just Joe Blow down the block. They would LOVE to be "vigorously prosecuting", but other countries are not going to let that happen. I mean, you literally have Bush going over to China with one of his major talking points being that China needs to enforce copyright laws more effectively.
That screams "lack of serious cooperation" to me.
So as it stands "vigorously prosecuting" is a "pipe dream".
2. The popular will to see a war on piracy isn't there. It's almost like a war on speeding. Sure, people will say their for it in general, but they don't really care and will quickly backlash if it did happen (see: Sony's latest anti-piracy trick that has brought a lawsuit from Texas or all the stories about fining Grandmothers and such when the companies do sue). People don't see downloading a song or game as "morally bankrupt". Not in general (nor should they, imo, but the problem is that it is viewed as a innocent crime).
The companies are not retarded, neither is their lawyers. Their not suing everyone for a reason.
Not to meantion the cost. Thats why they attack the software companies, much more time and cost efficient I'm sure.
3. For those who blame "lagging sales" (which is silly to begin with) on piracy, No. If piracy didn't exist, most of those download games would NOT be turned into sales.
None of this is supposed to justifies anything, but in terms of fighting piracy and piracys actual effects, I just don't see where some of you are coming from.
There is NO easy answer.