I know of someone who once had a modded PS2, we could rent, borrow, or download any game we wanted and just burn it to a disc. It becomes sort of how downloadable demo's are now. You will download a demo just to play it to try it out, and if it is any good you will go out and buy the game if you liked it. The problem with piracy of the full game is that if the games aren't any good you just stash them away or toss them in the trash and if it is good you keep playing your illegal copy.
They can educate all they want but people are going to do whatever they can to get away with it because they feel it doesn't affect them and that if they quit doing it it is only a drop in the bucket and doesn't add up to much difference.
Solutions
The problem here is the prices are too high for the masses and there is a convenience factor with downloads. (think about this iTunes prices really aren't better then buying the disc but they now have a larger market share then any other music store including Wal-mart or Best Buy, its about convenience)
So if Sony really wanted to combat it they would open up a PSP store online let you pay to download games to your own memory stick. You combat piracy by making it less hassle.
