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Nothing to worry about here, this won't be the death of the Switch.
Keep in mind the PS1 had rampant piracy (and to a lesser extent the PS2 with HDLoader) and it lots of games still sold well. The Wii near the end of it's life,had HD loaders as well. I think I recall seeing a study done by the EU that concluded that piracy doesn't really affect sales.
I'm willing to bet that piracy will require modifications to the firmware, which Nintendo will detect and ban those systems from updates or online play.

There may be a positive outcome in that Nintendo may release an updated hardware revision sooner than later.