Record labels think pirating music is theft.
Record labels also seem to think that giving away music you made is also theft since they don't get a cut.
Just look at the latest kerfuffle over Prince allowing a newspaper to give away his new CD:
"The Entertainment Retailers Association said the giveaway "beggars belief". "It would be an insult to all those record stores who have supported Prince throughout his career," ERA co-chairman Paul Quirk told a music conference. "It would be yet another example of the damaging covermount culture which is destroying any perception of value around recorded music. (emphasis mine -GW)"
How dare Prince give away music he wrote, composed, performed, recorded, and produced by himself! The nerve of some people doing what they like with things they made themselves. Next thing you know the proles won't want to pay $19.99 for a CD with only 2 tracks they like on it and will go to that iTunes monstrosity where they can just get the 2 tracks for $1.98!
Note that insulting the fans with huge a CD price markup would be perfectly fine with them but don't insult the record stores. The music isn't for fans you see, it is only to support middle-men. Also note the phrase towards the end about perception of value. The music industry held a monopoly on the distribution of music for decades and is truly resentful that their artificial price structure is now biting them in the ass. (the same model is currently used to limit availability of diamonds)
"HMV chief executive Simon Fox said: "I think it would be absolutely nuts. I can't believe the music industry would do it to itself. I simply can't believe it would happen; it would be absolute madness."
Note again that the fans have no place in the music industry's picture or music unless they are meekly opening their wallets and letting folks like Mr. Fox take arbitrary amounts of cash.
Quotes from the Guardian
Music fans tend to be idealists and lovers of art. Is it any wonder that an industry displaying this sort of base disregard would drive them to other sources legal or otherwise?