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Ip address should never alone be enough to point fingers and accusations, I think every torrent client in existence has the option of which IP to send to the tracker, now while that's there to make incoming connections easier to establish it could easily be used to give any torrent any ip address you wanted and get people you don't like sued.
I'm sure someone could knock up a program in 20 minutes that does nothing but send other peoples Ip's to random infringing torrents.
Then there the issues of the amount of hacker controlled botnets out in the wild I'm pretty sure lot's of innocent people are unknowingly infected and could easily have their computers used as proxys/bounces without their knowledge.
As for wifi security it has never existed, mac addresses are easy to spoof and all of the current encryptions can be cracked pretty quickly by someone with a sniffer and the right rainbow tables.
Even if you ignore all that how can you prove who was using the computer or if it was even at the address, I've even seen cable repair guys plugging their laptops into the cable box across the street and using peoples connections I presume they can do this at ISP level as well.
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