Actually, back during the Dreamcast days, Sega (the old Sega) put out an open letter to the community (which I swear I still have a copy of somewhere), that stated that they were not concerned about piracy, that's why they didn't put any security within the system itself, because they did not feel that piracy was a threat considering that most of the general public is made up of consumers that had no idea how to bootleg a Dreamcast disc in the first place. Secondly, they said that the piracy scene only served to advertise the Dreamcast by word of mouth.
That would have been more believable if they hadn't then produced a dreamcast that couldn't boot Mil-CD discs.
But the truth is they went to the effort of putting security in there, they just misjudged that Mil-CD would be an effective way of getting round it.
It would be like Nintendo/Sony saying the same thing about playing games off DVD-R by using the DVD video exploits (unmodified Wii & PS2 can both read burnt DVD-R by fooling it into thinking it's a DVD Video).