I think we just see more developers who would rather blame poor sales on piracy than on their own product; I:m looking at you Crytrek. Then we have the likes of Epic who think that people who are able to buy and install a video card are pirates; proclaim their latest game will be non-PC due to piracy only for said game to then be pirated all to hell and back on the X-box 360.
Piracy killing PC gaming? No. Poor business choices are mildy scratching PC gaming.

That's good for the customers in the long run - remember the Orange Box? That sort of value-for-money becoming the norm I only see as a good thing.

VERY good point made here that I wanted to draw a little more attention to. While NPD stats are important, they measure only sales at a physical retail outlet. What percent of that 'lost' $210 million was simply spent at an online alternative (Steam, Impulse, Gamersgate, Direct2Drive, etc.) instead? That's not lost revenue for PC gaming, it's just a different (currently unranked) revenue stream.

The effect of piracy on game availability pretty much depends on the cost of development. Most early 80s games were under $100,000. Also, their retail prices (constant dollar) was higher than it is now. So even if only 5,000 people bought your game, you would still make a profit. Now, quality games cost 100 times more to make. You certainly won't make a profit if you sell only 5,000 copies.
As for PC gaming dying, I think it is. Not dying in the sense of not having any more games, but dying in the sense that it is losing it's uniqueness. Games for PC always had a very broad range, from simple shoot'em up to complex games like Falcon 4. Unfortunately, it seems to me this range is narrowing and PC looks more and more like another console platform for the mainstream audience. I certainly feel it's now more difficult to find good niche games on PC than what it was in the past. Piracy is not directly related to this change, it's more because of this race for graphics, but ending piracy is our best chance to offset the raising cost of game development and to have at least a few good quality niche games.

Jeebus is killing PC gaming. For realz. :(

I killed PC gaming in 1998.

@ maertin - Damn! How did you do it? And, why, WHY i ask you?:P
@All - What do you think about the huge budgets that are now being used to produce average to lousy titles. Is it realy necessary to spend all that money to make a (decent) game)
On another note it seems epic is doing a pretty good job with their DRM, check this post.