Sure, someone can circumvent that by circulating their purchase Account ID and Password. What could possibly go wrong, right? Someone could even use multiple IDs all the time by keeping a slew of app installs on virtual machines, but that's effort. Even just deterring the lazy pirates would be significant.
It's not that much effort at all. I've
heard of a group of friends who share a single D&DI account.
But let's say that system is in place, and let's say it somehow prevents people from sharing IDs and passwords (and the actual files). The pirates will extract each book (or just scan the physical copies), convert them to PDF, and upload them to torrent sites. If you want to steal that book, it would be as easy as going to a torrent site and downloading it--and then you have a PDF, which is an extremely convenient format you can use anywhere you want.
If you're a legitimate customer, you have to go to the WotC site, faff about with product IDs and such, give them money, and end up with a restrictive, proprietary, massively inconvenient product.
See how the product the pirate gets has way more value than the product the customer gets?
That's what you have to address. The product you get by paying should be
at least as good as the product you would get by pirating.
What I'd really like about something like this would be the option to re-download the latest version of a book I purchased with the latest Errata already integrated (if not in the layout at least as a rollover or flyout at the appropriate section). One of the biggest selling-points for the digital Compendium and Character Builder for 4E for me was not having to cross-reference errata documents with the books.
That feature would require the latest and patch of the app, thus reducing the value of unlicensed 3rd party reader apps or cracked versions of the main reader. Updated versions would add value over the typical leaked print-shop pirate PDF copies of most books too.
That's a start. It gives the customer a service he actually wants to use, rather than just devaluing the product. Still, I don't see how that would prevent people from sharing IDs and passwords.