"...why do we allow second-hand bookstores? Why do we allow people to lend CDs to their friends"
It is a question of degree. An author or artist was paid once and lent a couple of times. Note the used bookstore made money on that example exchange as well. Libraries are a better example and they do pay special rates for their content.
There has to be a middle ground between "read once and locked to a single device" (extreme interpretation of those who favor DRM) and Giggle's "all your book are belong to us" attitude.
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