While there is a lot of piracy, it's relatively small compared to the overall entertainment market. It's still been generally limited to the tech savvy crowd. Setting up bittorrent or usenet is just too hard for the average person. They could learn it, but they are unwilling to even try to.

An app like this? Which is just download and it works? That is a huge threat. My grandma could use this.

So while a small amount of piracy isn't harmful, everyone being able to pirate everything with total ease, is harmful.