Copyright Enforcement or Why Are My Tax Dollars Protecting Sony's Profits?

This springs from a discussion on a mailing list I belong to. While it was off topic for that mailing list it did catch my eye and make me want to spend more time pondering it. The question posed was around copyright violations being a criminal or civil offense.

As it can, the discussion wound down to my pessimistic opinion that law enforcement prosecutes large scale copyright violation for two reasons.
1. We gotta make it look good for everybody else, we can't really complain that other countries don't protect our copyrights when we don't protect our copyrights.
2. The tax base isn't supported by the sale of pirate works. Law enforcement is protecting their income by maintaining a status quo with the pirates.