Even if it is cracked, it is a deterrent to *most* people. Those people who it is not a deterrent to are either very dishonest essentially (bad karma for them) or they would not ever have been able to afford to pay for the software anyway - and that becomes a moral argument but not in the immediate sense a financial one. For most people however, it's a pain, cracks are often unreliable, you don't get updates, and you have to navigate through virus laden websites and so on in order to get it, which risks your whole computer... not that I've used cracked software, I've simply been around computers long enough to know these things.
I think the solution here is a bit of common sense and flexibility on VSL's part as well as the customers. For example, I once had my hard drive crash and had to get a new license for some software, then a month later, the new drive crashed as well, I explained this to the software company that I was NOT using it on other computers, and they gave me a further license. A year later, I upgraded my computer and once again they obliged, even though it never says they have to do that on the license. In VSL's case, if somebody truly got robbed, yes, there may be somebody out there using a stolen dongle, but really are they selling music from it? I doubt it - in a case like this, I think it would not hurt VSL to give another license to the customer who had until that moment lost everything. A bit of discretion is all that's needed to patch over a situation that will never, cannot ever be perfect.