The other thing you have to remember is, the people involved are totally inept.
That's not a quip about politicians, the head of the committee admitted he knows nothing about the internet, as did many members of the board, claiming they weren't "enough of nerds" to understand anything they were dealing with.
So in this case, it is literally the blind leading the blind. The bills were proposed and organized by individuals with no sense of even basic internet operations. You really can't expect them to develop a purposeful, efficient law against piracy, since they aren't even sure how the crime is committed.
This is the problem with representative democracy (from an idealist perspective)...
You need experienced and mature individuals in the legislature, so that they may govern effectively. Be it businessmen, lawyers, charity tycoons, whatever; all of them must have 10-20 years experience in a field that would make them fit to represent.
But for them to be experienced, it means that they're all oldies, and thus out-of-touch with the younger generations. They don't know anything about this fancy-pancy Internets, but at the same time you can't have inexperienced 20-somethings in government either.
The problem will correct itself as this generation (born 1980 onwards) become the new leaders of society. The question is whether there'll be a new wave of technology that we'll all have become unfamiliar with, or will the foundations we have with this current gen of technology give us a platform of "transferable knowledge" for any future advances?
Alas, you can even see some of the grumpy conservatism towards generation gaps that aren't even 5 years apart yet. Just look on these forums; bitterness towards the new era of Michael Bay FPSs, "Games aren't as good as they used to be rabblerabble" etc.
It'll be curious to see.