yes, the lawsuits educated people but if there were no penalties for violating the law, then no one would care. In the morning when I am not so tired I will try to find what this concept is called, but the basic premise is that laws in which it is hard to detect violators, you have to make examples out of the few cases you catch in order to deter the masses. Universities employ this with their honor codes - it is hard to detect a lot of the cheating that goes on, so when they do catch someone cheating they punish them hard so that the vast majority of students will fear the repercussions of cheating and not do it.
It definitely was a scare tactic, but that was the whole point. It is really hard to catch this kind of theft, so when you do, you have to punish it hard so that people will think, hey, I can probably get away with it, but if I am one of the unlucky ones who doesn't, it is going to be so painful that I think I would rather pay for my music than risk it.
I actually agree with that, but the problem is how do you make sure that the device belongs to the person who owns the copy of the movie or the song and isn't a device owned by someone else they want to share the copy with?