Rationally this is true, so in a rational discourse your argument is clearly superior.
Emotionally, there's some truth to the other side. Back when I was in university (this was around '02 mind) the cracking scene blew up and you could get any new PC game for free on Kazaa and the like. Being poor, having no morals and liking internet and games, I started hoarding large amounts of games. You can't compete with free right. Interestingly, while my game collection was now larger than ever, and I also had more time than ever, my actual gaming interest reached all time lows. I downloaded all these AAA games, and couldn't play them for more than half an hour before losing interest. The games effectively lost their value when I got them online and for free. Not like before when I would save up for weeks, go to the store, caress the case and read the instruction manual from front to back, before inserting that expensive game into my PC/console.
It's the same reason why Nintendo was so vocal against lowering the price of their hardware and games, even though that would lead to more sales. In the longterm, it lowers the intrinsic (and not just monetary) value of the brand and games in the public's mind.
Offtopic but yeah.
I sort of have the same thing with Steam sales now. I love buying all the games. I never play them.