Quote: "It's easy to be ok with piracy if you've already make a lot of sales with your game. If you're the average indie developer, piracy will hurt you a lot."
Definitely. If you're well into your profit margin, you can consider piracy an unbeatable enemy, and simply take the hit. After all, the resources and effort you have to throw at it will eat into whatever you'd gain from extra sales. Also, their long term gain benefits from piracy since people will have to play to play there online game. However, as someone whose first game hasn't yet achieved what it needs to achieve to justify it's creation, the fact is has been cracked and is available on torrent websites isn't great. I have no plans for an online MMO (lol) so I don't get much of a benefit from free exposure.
I don't lose sleep about it though, as there's pretty much nothing I can do. I find it amusing though, that Space Squadron was priced at 50p (79c) for ages. Literally, throw away money, and people still cracked it and download it illegally. Not only that, but people constantly try sneaky ways to get refunded. For example:
"I didn't download it - someone stole my phone and did it"
"I only played it for like 5 mins and then deleted it" (10 days after purchase)
"It crashes my phone! After about an hour of play, it crashes my phone. It's done this like 10 or 20 times" (so you've had 10 or 20 hours of play for 50p, and you want a refund?!)
Or my personal favourite ...
"I never bought this game. Please don't charge me". ..... ok.

When you see the attitude of kids trying to get refunds, it's obvious to me these people would take the pirated version without a second thought. The only reason why they didn't, is they've either not found it, or it was cracked after they bought the game. By having copy protection, there is a definite conversion of sales from people who otherwise would've stolen it. I estimate this to be very high indeed. At least 20%.