The fact that the punishment is so much more serious than the crime speaks to the real motives of the suit, that is, not to punish the individual, but to serve as a warning to other potential offenders.
I'm not the pirating sort myself, unless the music I'm trying to get can't be obtained any other way (music from smaller bands from other countries for instance), so I'm not too worried. As for those who do pirate their music, I suppose they might want to take the hint that the industry isn't going to show mercy to those pirates they catch.