I think this sums up the issues developers are facing nicely. From Michael Fitch of THQ / Iron Lore (Titan Quest):
“One, there are other costs to piracy than just lost sales. For example, with TQ, the game was pirated and released on the nets before it hit stores. It was a fairly quick-and-dirty crack job, and in fact, it missed a lot of the copy-protection that was in the game. One of the copy-protection routines was keyed off the quest system, for example. You could start the game just fine, but when the quest triggered, it would do a security check, and dump you out if you had a pirated copy. There was another one in the streaming routine. So, it’s a couple of days before release, and I start seeing people on the forums complaining about how buggy the game is, how it crashes all the time. A lot of people are talking about how it crashes right when you come out of the first cave. Yeah, that’s right. There was a security check there.
So, before the game even comes out, we’ve got people bad-mouthing it because their pirated copies crash, even though a legitimate copy won’t. We took a lot of shit on this, completely undeserved mind you. How many people decided to pick up the pirated version because it had this reputation and they didn’t want to risk buying something that didn’t work? Talk about your self-fulfilling prophecy.”
After reading something like that I can symphatize with, although ultimately not accept, the desire to just smack an easy DRM like SecuROM on and be done with it.

If I recall correctly, Assassin's Creed Director's Cut for PC had an intentional crash bug programmed into it for pirates, which eventually led to them having tons of negative press regarding the crashes, despite being from pirates.
On the upside for Ubisoft tho, they tracked down the leak: An employee for the company that was manufacturing the discs. I bet that lawsuit was real fun, especially since they could sue for damages brought on by the pirated release and loss of sales. I never heard about any further outcome tho.

Well, they already postponed PC version to get console version to shelves first. Still I don't think these actions are that evil in the sense of ruining their CUSTOMERS day. But for pirates, it's a new low to cry customer support for product you did not buy. For company, it's money down the drain and possibly lost profits as people think the game is flawed though it's only because some codekiddie tries to get through the protections and "be first" to get some silly scene credibility (which was cool in 90's when they had those cool tracker videos at start). Now people are too selfish to care about anyone else.
From what I've heard, the crack is the one breaking the game as it's not passing some copy protection tests and triggers these FADE-like "features". I'm not a big fan of copy protections but heavy pirating isn't going to take them away (the right way).

PWNT
Although it's not like the pirate was exactly Mensa material.

The trick is to make it obvious that the 'errors' are intentional. For instance: give Batman a crappy pimp hat and a retarded expression and have him throw himself into the poison gas with glee.

While that "You Are a Pirate!" song plays in the background.
http://www.youtube.com/watch?v=BNcOlcTwnwg
EDIT - Heh, I've never actually seen the original creepy kids TV version of it before:
http://www.youtube.com/watch?v=ZLsJyfN0ICU

Perfect!
Add to that some Spectrum/C64 style loading screens too. The whole thing should have as much of a Gary's Mod feel to it as possible. Only it won't be so entertaining for the pirates, of course. It would be like a whole new, completely unplayable game.

I'd just like to remind people...
DON'T COPY THAT FLOPPY.

I'm sure thousands of gamers will pirate the game to hell and back just to play Batman with a pimp hat.

Heh, old school!
http://www.youtube.com/watch?v=up863eQKGUI

Well, more like don't copy the 8000 floppies (Arkham is 8GB apparently).

Oh crap, it gets better, they made a new one! Just released this week!
http://www.youtube.com/watch?v=hUCyvw4w_yk

LOL Damn! Now he's turning into Lance Boyle! ...with Klingons...

Damn! I've been bored all week, thanks for cheering me up.

I've heard both the "shareholder" argument before, and it just doesn't seem to hold water. Company executives have a legal responsibility to maximize shareholder value, but this responsibility refers to actual value, and not simply a temporary boost in stock price until the shit hits the fan. If executives are taking actions they know will actually decrease shareholder value beyond the next quarter, or if they take these actions to deceive buyers into valuing the stock more highly, then they are actually personally liable to shareholders (limited liability works a bit differently for executive officers). I simply don't see too many executives going down that path. Additionally, there are quite a few cases of privately owned companies taking the exact same actions regarding DRM, where shareholders aren't even a factor.
But neither does it make sense to simply write it off as publishers and developers being stupid and not realizing that their anti-piracy efforts are counterproductive, as the folks making the decisions are certainly smart enough to sort through the whole matter if they consider it carefully and logically.
Rather, I'm currently of the opinion that the counterproductive anti-piracy efforts stem from a combination of psychology, ideology, and dogma. To go into this further, having people pirate something you worked hard on quite simply pisses people off, and understandably so. But as a result of this, there's a strong desire to stop and/or punish pirates, and this weaves its way into ideas on how to boost sales, resulting in the proposed solutions not being considered in a fully rational light, and anti-piracy solutions being given more weight that they reasonably should. In addition there's an ideology of control that permeates much of the industry; the sense of ownership of those who created or significantly invested in creative works results in them being highly reactionary towards those who, though their actions, remove some of the control that the creators/publishers have over their works. Add to this the (mostly) unchallenged dogma within the industry that a significant portion of prevented piracy turns into sales and you have convergence of conditions that makes the counterproductive anti-piracy efforts seem perfectly rational to those making the decisions, even when it actually doesn't increase sales at all (and actually hurts them).