The reason for DRM isn't a terrible one. Piracy is illegal for an important reason. Socialism in art is a good thing but, like the capitalist approach, probably not universally. The reason is to protect sales of course. DRM is perhaps inherently flawed within our technological ability to deliver it. Given perfect DRM, you could do whatever you want with the content, up to the point of breaking the law.

It's difficult to conceive of technology that would allow this to happen. Perhaps in the future  all of our gadgetry will have 100% connectivity, and playing music (for example) could involve streaming it from the vendor on demand, after authenticating an account. Assuming this miraculously works without usability issues, nothing defeats the analog copy (unless bit-for-bit quality is a real concern), which sparks a memory from 10 years ago: SDMI.

SDMI's secure watermark was an attempt to differentiate each instance of content sold to consumers. The consequence of piracy could then be anything from revocation of the particular watermark (so that SDMI hardware would refuse to play it) or, in a situation more compromising of piracy (i.e. the customer is linked directly to the content instance), that particular person is easily identified and prosecuted.

The hardware aspect, of course, was too salty to swallow. We refused to believe that watermarking would work correctly, or leave the sound unaltered. After all, it was supposed to survive analog copying. Manufacturers didn't seem to like it much either.

But imagine: what if it worked? SDMI content was altered only by the inclusion of the watermark, meaning that it would work with non-SDMI hardware, and fair use is entirely unaffected.

There have been no developments in SDMI since 2001. DRM was first applied to music content in 2002, as though in response to the failure of SDMI. DRM was everything SDMI wasn't. It had nothing to do with changing the content, but rather its encapsulation. It didn't care for legacy hardware, creating problems for just about everyone, especially PC owners.

The reason is to protect sales. Perhaps unfortunately, it didn't help, or didn't create the perception of helping sufficiently in the long term. Some of us have a hard time finding fault with the notion that flooding the market with poor content will reflect sales identically to any other reasons you have for being unable to sell your content.

Today what we have more of than DRM is lawsuits. The RIAA is in the news every day, with someone new in court. Not even innocent old ladies who do not comprehend the tools required to commit the transgression are safe from the RIAA. That's a powerful image for their campaign against piracy.

Another something in their campaign also carries a lot of power. Damages awarded in each case are disproportionate to that individual's contribution to those damages. There's rarely a case of a linchpin seed on a torrent tracker for a particular piece of content (as opposed to a particular seed), yet they're being penalized for extrapolated potential damages... despite the fact that their abstention wouldn't have made any real difference.

Take the nightmare scenario for SDMI where you must present ID to purchase music, and watermarks are created in stores. Aside from the cool new distribution technology that implies, the RIAA gets your name and watermark, and they know which music you listen to. If you pirate the content, they will sue you for potential damages. That might sound familiar.

Not only is the RIAA already suing for potential damages, in as much as they care, they already know what music you're listening to. It's very unlikely that they care what your name or mailing address is in particular, only the aggregate data is really useful. They already gather this kind of information directly from torrent trackers, but you might even be one of those people that goes slightly out of his or her way to generate that data. Go to my user info page to see my last.fm thingy.

In terms of intention, it seems that the RIAA and related parties seem to have gone from fair to vengeful. SDMI was intended to be seamless and effective. DRM was intended to be as seamless as possible, even if that was still fairly jarring. Lawsuits and fearmongering are really just intended to take your money and scare you out of stealing. SDMI was very naive in a lot of ways. I hated the idea, but I think I like it better than what we have now, and I think the involved parties maybe thought that way too, with the exception of manufacturers.