This isn't entirely true. I work for a very small company (about 5 employees). I work as the lead software developer but we don't distribute our software, we use it to provide a service. Think of something similar to Yahoo Stores, where Yahoo provides a web service to people that want to sell stuff online but don't have the knowledge to set up a server, shopping cart software, register domain names, get an SSL certificate, etc.
There are plenty of small software shops making money, too -
http://fogcreek.com/ http://vbulletin.com/ http://sourcegear.com/ to name a few.
Personally, if I started selling software, for instance most of those are web-based software companies, I would definitely run searches on google and go after people that have the software installed but don't have a license. However, this wouldn't be that important if I was making decent money - you have to think of it like this:
I can spend 4 hours a day tracking down and eradicated piracy (which doesn't net me any more money) OR
I can spend that 4 hours a day improving my product, doing marketing, or working on new products (definitely will net more money)
I'm definitely not saying that piracy is right - I hate it, but I think these companies that spend so much money fighting piracy are missing the big picture.