Now, the answers to the questions:
Utilitarianism is concerned with the greater good, so one might argue that stealing is okay in order for more people to benefit from the music and, ultimately, be happier. Social Contract theory pretty much puts a stop to any illegal copying because our laws do not permit it. According to Kant, stealing would not be permissible because if I were an artist, I certainly would not want others to steal my music, therefore I shouldn't do the same to them.
I really like the direction that Radiohead seemed to be going. My idea is to abolish record labels entirely and along with it, CD's. Make music an entirely digital item, completely rethink album covers and such. Don't put any protection software or device on the music. Try the approach where you appeal entirely to consumers integrity. Yes, music will still be stolen on a very large scale, but I think that artists will, ultimately, get more money for their efforts than they ever could with a selfish, stuffy, money-grubbing, tasteless, greedy, and corporate record label. This way artists costs will be to their recording studios and to their web hosts/distributors, and that's it. No more huge chunk of cash going to the record label big-wigs. Basically, the best protection is none at all. The likely losses can be recovered by eliminating the middle man. Some people might complain about not having a hard copy of the music or say that some people don't have computers, they just want a disc to put in a CD player. To alleviate this, you could have a system similar to the one used by disposable digital cameras. You take the pictures, then you go to a machine in a Walmart or Target and the machine takes the pictures off of the camera and puts them on a CD. Perhaps you could have a machine that would detect the music you have on your iPod, then allow you to choose an album that you own and the machine will burn the CD, put the graphics on the top of the CD, print the album cover, fold it, and dispense the CD case so that you can assemble the hard copy. The machine would have to somehow verify the files and only allow you to create one hard copy. Also, it would have to charge a small fee. Anyway, it's just an idea.
I think that a lot of people rationalize it by assuming that the artists whose music they are downloading are probably wealthy enough as it is. The artists aren't going to be hurt that badly by it, after all it's only one, two, ten songs. No big deal, right? Furthermore, once the music is downloaded and stolen, it's hard to delete it. Very hard. Then you promise yourself that instead of deleting it, you'll buy it all over time, but who are we kidding, we're college students. We don't have that much extra cash to spend on music, so, realistically, it'll probably take us years to purchase all the music that we've stolen since it's probably numbering in the thousands of songs. And of course during these years in which we're paying for all the stolen music, we're not once going to choose to spend our spare $10 on a new CD instead. Certainly not. Honestly, I have no idea how people really rationalize it, because even after considering all the things above, it still seems quite wrong. Personally, I have 1200 songs, and out of those 1200, there are only 20 songs (two albums) that I didn't purchase. I borrowed the CD from a friend and ripped them onto my computer. I'm still working on getting those paid for.