@darth

There is a difference between is it bad (a moral question) and if there is a negative effect (a functional one)...

There is clearly a negative effect for those trying to sell games. Whether it is moral or not is far more complicated and is a matter of varrying degrees..

Morality aside some of the negative effects that result from a culture of pirating:
1) People are less incentivized to create good games since they cant make as much profit off of it.
2) When games are made they need to use heavy DRMs that punish the people willing to legitimately pay for it.
3) Job loss

A moral judgement would have to weigh the good of giving someone a game to play and some enjoyment, vs these negative effects.