This is exactly like the war on drugs. It is never going to solved by enforcement, but by addressing the consumers who are the source of the whole fiasco. No matter how much the 'el cheapo' pricepoint varies over the years, there are always going to be people abusing. The question is, who are the end users of these crap sites, and how to win them over into understanding the moral (ignorance is bliss) and legal consequences.
I honestly believe it could have been much worse had the trend of social networking + the demise of Google Adsense being an easy money maker not crushed the big rush for everyone to produce massive volumes of independent content for the web. 4 years ago it was all about the cool images on your website, now it's moving towards the social networking elements where non-visual ideas are more important then static images. While every stock photographer likes the idea of their image being in some magazine, the reality is the digital-only medium is growing exponentially and it's outgrowing it's pants in usage rights. See
http://blog.melchersystem.com/2009/05/06/its-your-problem-right-now/You can be sure the majority of people visiting these types of pirate sites (as Flemish described recently) are not really anyone reaping huge rewards with the content. They are students, poor people, from countries with harsher conditions than many of us are used to. I like to joke sometimes about internet pirates with cows in their living room like Borat but seriously the mass of this planet is financially oppressed - let's try to open the tangents for them to succeed instead of playing wack-a-mole with 123-webhoster.com.