Their weak DRM certainly serves as a deterrent to the average consumer, but even more so to the mainstream coffee distributors that have been selling "knock off" cups up to this point.

Community Coffee, which is a major roaster/distributor in the deep south, just caved and penned a licensing agreement with Keurig:

http://theadvocate.com/news/acadiana/10981551-123/community-...

Prior to the (negative) publicity surrounding the 2.0 launch, I didn't pay enough attention to notice that the Community Coffee K-cups I've bought (exclusively and in bulk at Sam's Club) for the three or four years that I've owned the machine weren't bonafide Keurig cups, but I think a typical consumer (and retailers, too) would likely be put off if the pods came with instructions for cutting the lid off an authentic Keurig cup and taping them onto the machine.

I'm betting every region has their version of Community Coffee and that Keurig will succeed in converting many of them into licensees. There might be negative publicity that is seen by those of us who care about such things, but on average, Keurig will come out ahead -- maybe without filing a lawsuit.