Yes, it is a hypothesis. Yet there is also good reason to believe that hypothesis. I remember a time when the music industry was facing a similar problem: they had essentially zero digital music sales because they either didn't offer their products for sale that way or they used enormously restrictive DRM. People had a choice: they simply didn't buy it or they pirated it. Then Apple came along with a decent music catalog and much less restrictive DRM and digital sales became a reality. People started buying digital music rather than pirating it.

There are also more theoretical considerations: preventing digital sales or lending doesn't prevent piracy since it only takes one digital copy to start the spread. Having a few thousand extra digital copies (from legitimate sources) doesn't really slow the spread since the network can create that many copies in a matter of hours. However, reducing the number of potential pirates will reduce the spread dramatically since the effects are cumulative. It's a fairly basic math problem actually.

Then you have to think about the nature of piracy itself. It is hard to get into (it is an illicit activity so you can't be too public about it) but it is simple to do once you have the know-how. By presenting people with a legitimate option up front, you make it less likely that they will learn the skills necessary to pirate materials, thus reducing piracy overall.

Those reasons, and others, is why I think that the piracy argument is a red herring.