I remember when this was posted at Slashdot a week or so ago - I think this is in line with the argument I was making in the "PS3 cracked" thread. Will need to read in further detail. Definitely interesting.
I think the successful product isn't one that can't be cracked, but one that people want to pay for rather than simply use. How many of us have paid money for crappy commercial software? How many of us have donated to free software projects? How many of us have paid for commercial software that's worth every penny? (some of my examples: WHDLoad, Poseidon)