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I think LazyScot summed up my thoughts on the student photocopying issue pretty well. Most people wouldn't bother photocopying a $5 paperback, and students are kind of the exception to the rule. I guess I grew up in a somewhat atypical place, since I only knew of students who would copy a few pages or maybe a chapter of a textbook. At 10 cents a page, copying a whole textbook would get pretty expensive (still cheaper than buying it, but the extra hours spent copying it add up). But yeah, once the first copy is made, additional copies are only a matter of loading up the sheet feeder...
As for the whole DRM approach that publishers are taking, this is an instance where I think something similar to the whole Zune "squirting" thing might actually make sense. It would be nice if you could squirt a copy of a book to someone else, and then it would expire from their device after 2 weeks. Put a semi-lock on the owner's file that says something like "only 1 squirt allowed per week" to prevent you from handing it out to anyone and everyone. Of course, this requires that everyone have the same/similar type of device that supports this scheme, so it'll likely never happen. But if DRM is required (which I'm not entirely convinced it is), then this is a level I'd find acceptable while still being usable.
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