It's very similar to what the music industry went through with Napster. They cried and cried about music being traded, then took the hint and offered it commercially. iTunes is now huge.

Name one adult paysite that offers a 750 MB DVD rip in XVid AVI format. There are none.

And I don't want to hear about the VOD sites either. Even their top quality options are lackluster compared to what video technology is available, and in use among traders.