This I have not experienced. I think their streaming selection has a lot to be desired (which isn't even remotely their fault), but I haven't found their by mail service to be lacking at all. What sort of issues have you experienced?
No way! Netflix is way before the piracy "issue." They came into being to stick it to B&M rental shops, like Blockbuster and Hollywood Video. I subscribed to Netflix in '98 or '99, like around the time Napster just started to catch on... I think when Scour was still popular! Years before the big boom - DirectConnect, Kazaa, BitTorrent, etc. Back when Netflix started, pirating music was still a pretty new concept. Nobody had even thought of trying to send video yet.