Similar aspect for game developers really - I'd say the publisher/management etc get the bulk of funding - game developers, from what I hear, are typically overworked and underpaid.

Piracy isn't the nicest thing, however, regardless, it's rampant amongst anything involving digital software these days.  (personally, the people selling this stuff simply aren't doing it the right way and are stuck with old thoughts)
Complain that it's bad on the PSP and I'll say that it's perhaps hundreds of times worse on other platforms like the PC, music, movies etc.  Yet I see plenty of enthusiasm for people to release new PC software and games.
Yes, there are probably those who see this issue and just don't bother, releasing games for the platform, but the effect is much more limited than you think, I'd say.  If you're a games development company, what other platform would you turn to?  Would this new platform stop piracy?  Alternatively, disband the company and go elsewhere, however this course of action requires quite some justification.

As a developer, you shouldn't really complain about piracy that much.  It's like complaining about all the deaths that occur in third world countries.  Yes, it's horrible and I wish it didn't occur, however I simply don't have the power or influence to change things.  If everyone kept imagining about these horrors, no-one would get anywhere.  Well established issue, no well established solution.