The internet isn't the reason that I don't buy albums. I've always shared music with my friends via tapes and CDs, so really, pirated music only expands my selection of choices. I don't think that music piracy really hurts artists, either - with almost every concert I've gone to, it's been a band I found out about through recordings that were given to me. Any tiny loss of sales is made up by word of mouth. If it weren't, then don't you think radio and cassette recorders would have killed the recording industry a long time ago?
A lot of people, especially young people, can't afford to buy new CDs all the time - they certainly can't afford to both purchase albums and attend concerts. The way I see it, the bands I want to support only get a fraction of my dollar, no matter what I do; either 99.9% of my money goes to record companies, or 90% goes to TicketMaster. Concerts are more fun, anyways. If you look at albums that smaller bands produce and distribute at or near cost, you'll realize that record companies are turning over 1000% profit on most albums, and vastly more for popular artists. Bands around town here make good money selling their albums at $4 a pop, even when they're only producing CDs 500 at a time.
Besides all that, fandom has become kind of detached from the profitablity of mainstream bands. The amount of money coming in to popular bands directly from fans is likely a pittance compared to the profit to be made on advertising endorsements and soundtrack deals.
~Joe