Because the best way to convince a producer to lower the price of their goods is buy lowering the ROI for said producer. That totally works.
I realize it is counterproductive, but Hollywood has been making terrible moves since long before piracy was a big deal so it obviously isn't effected that much by it. Perhaps more so than in the 90s. Regardless, I have a hard time justifying spending 10$ on a movie ticket, 20$ on a DVD, or 50$+ on a boxed set for a television show when I cannot be sure of the quality (I rarely read what critics have to say) and whether or not the DVD will be "obsolete" in a relatively short amount of time. Ontop of that, CDs/DVDs are perhaps the worst possible way to store media due to how fragile they are.