Be closer to selling (or giving away) knock off handbags outside of the Gucci store rather than walking in there and stealing one. How many people who get the knock off would have bought the original otherwise?
Also you have those studies that show often people who download pirated stuff also spend higher than average. Cut their internet connection and you also cut them off from legitimate purchases (legal downloads, ordering CD's, DVD's, BluRays). Suppose it might lead to an increase in brick and mortar sales, but I wouldn't be surprised if widespread implementation of such a policy resulted in a noticeable decrease in legitimate sales. Especially with children getting their parents cut off and the like.