Sorry, I disagree with most of you. It is the universities choice on how to handle the network they own. If a university refuses to give out information to the RIAA without a court order, I fully back them. However, I also fully back the university's right to monitor their own network and report any potential illegal activity.
Think of it this way: if a professor reported a group of students passing around what appeared to be guns in his lecture, would you fault the University for bringing in the police to investigate these illegal activities? Now, just because you believe the activity should be illegal doesn't make it so. Don't like the law, either break it in obvious protest and accept the consequences (and get as much media coverage out of it as you can) or change the law first.