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Not all incentives are financial.
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If your point is that artists should just create because they are special and should just not bother about making money, I reject that, along with most artists. The myth that the proper position of an artist is that they should be starving in a garret somewhere is just that-a myth.
In the end, the best way to get creative people to to produce new creations is to ensure to that they get paid. That will eventually mean bringing the EFFECTIVE rule of law to the Internet, including law enforcement against piracy . If that means bringing to justice owners of the TPB and similar sites, then the sooner the better.
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You didn't answer the question: any evidence of less illegal downloading? (Mediafire, Rapdshare, YouSendIt, Glumbouploads, Filefactory, Filereactor, Crocko, Bitshare, and Netload seem to be fairly unaffected.) Will media companies announce higher revenues next quarter because MegaUpload is now gone--or was this a publicity stunt more than an actual blow against piracy?
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The evidence from France and Sweden shows that LE does reduce piracy and illegal downloading. A year from now, we'll have studies to show whether the Megaupload case had a significant effect. What's needed is legislation that would enable Law enforcement agencies to strike at piracy sites located in foreign safe harbors. Such legislation will most likely be enacted soon.