I agree completely. We should also start owning the term and framing the debate around it. Cast it in positive anti-establishment terms. Like pirate radio, Robin Hood, V4vendetta. Lone, beleaguered hero(s) fighting for the peoples against tyrannical and oppressive regimes.
What might help is if someone started a file sharing site and named it after a place where pirates hung out and incorporated a pirate ship and the word "pirate" into their logo.
Then maybe if it became popular these so-called "pirates" could cast off the shame of being tarnished by an image they clearly don't embrace at all.