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While sharing software between friends may be better considered as grey space, businesses deriving retail value off pirated software is unacceptable.
The home user showing his neibour how to get his computer up and running with MS is part of how MS captured so much of the market; they demand at work what they are familiar with. Though not to the letter of the law; it premotes use more than hinder's sales.
Now, a business stealing software (be it Microsft unlicenssed duplications or Open Source not to the letter of it's GPL or similar license) only harms the progress of computing resulting in crap like the WGA quilty-until-proven-inocent tacktics.
"...then tests the software and software components to determine their authenticity..."
It could very well be that MS is suing innocent people, and this is all a fundimental flaw in the WGA software, which has been report by MANY XP users.