I actually believe this has already happened.When file sharing decreases because of a rash of lawsuits, let me know.
Its like speeding tickets. Most people don't get tickets when they speed. Some people do. Everyone still speeds, but not as much and they're more discrete about it.
There's... a bit of a mismatch between the penalty amounts and the crime, unfortunately. We'd probably have a more efficient regulatory system if, instead of mercilessly beating up one in every million illegal file sharers, we dinged one in every ten thousand every few days. But that would require government action. The private system isn't set up to allow one entity to sue thousands of smaller entities. It does alright with thousands of small entities suing one large one, but not the reverse.