What Napster is doing is in defiance of that law which carries a fine and, in some cases, a jail sentence. Napster is supplying burglar tools to a public that is not aware of the circumstances. That same public, if it can not afford a car or a home, knows it can not have them. They can not download that car or home. That would be theft if it were technically feasible.
Intellectual property is entitled by law to the same measure of protection.
Historically there's nothing new about this. When printing first appeared on the scene, there were a lot of efforts to control it, and, in fact, our current system of intellectual property law is built on a reaction to the abuses that went on in the British printing industry. When the British kings licensed printers in the early 17th century, they granted a monopoly. Unlicensed printers were prosecuted in the Star Chamber, a special court with extraordinary powers, and without the protection of trial by jury. But one of the big results of prosecuting printers in Britain was that a lot of them moved to the Netherlands.