Doesn't Android provide a license verification service, much like the recently discussed iTunes receipt validation process? I have an app, GPS Aids, which checks online if my license is valid. Again, this can be blamed on the developers, for not taking any reasonable steps to prevent piracy. If the app has to be cracked, it's going to reduce the piracy rate quite a bit.
As an aside.. I would never pirate a $1 app, that is just ridiculous. I've spent way more than the average person in the app stores.
Yes, and the licensing service is actually one of the most used developer libraries embedded in Android apps ( http://www.appbrain.com/stats/libraries/dev ), although it's quickly being overtaken by the free + in-app billing model at the moment.
Yes, and there are widely distributed tools (Lucky Patcher) that remove that license check. As long as you can jailbreak (or sideload) there will be a way to bypass the copy protection, unless there is a server-side feature with server-side receipt validation. Ever has it been thus.
As an aside.. I would never pirate a $1 app, that is just ridiculous. I've spent way more than the average person in the app stores.