File sharing is never theft. It is often copyright infringement, but never theft. 'Theft' and 'Copyright Infringement' are well-defined legal terms, and the two are not the same. 'Theft' and 'Piracy' are loaded words used by 'creators' and 'artists' to describe copyright infringement, in the hope to elicit sympathy for the way the big bad world is treating them.
Theft is the illegal taking of an item of someone else's property (be it tangible (like a car), or intangible (like a domain name), depriving them of that property. The physical manifestation of a work of art (a CD, painting, book, etc.) is tangiable property, and can be stolen. The work of art itself (a song, image, story, etc.), however, is not property, tangiable or intangiable. By looking at a painting, reading a novel, or hearing a CD you make a copy in your long-term memory that lasts for a lifetime. The source of the art (the CD, painting, book) is not affected in any way by this copying. Copying an MP3 from one (electronic) computer to another is exactly the same as reading a poem from memory to a friend. Neither is theft.
Copyright infringement is the illegal breach of a government granted monopoly on the reproduction of a work of art. Simply observing (and therefore memorising) a work of art is not copyright infringement; to infringe copyright, you must share the work of art with another, where you do not have the right to do so (the 'copy right'). Certain acts of copying (listening to loud music in your car in public, or reading a book aloud to your children) are legal; this is known as fair use. Other forms of copying (Showing a DVD on a large screen to your film society, or selling copies of a CD for which you do not own the copyright) are illegal, unless the copyright holder grants you permission.
Illegal file sharing is copyright infringement. To say that illegal copying of files is 'theft' or 'piracy' is dishonest, unless the files are somehow copied while shoplifting, or forcibly boarding a vessel on the high seas.
The law, especially copyright law, is very much a grey area. I am not a lawyer, and this should not be considered legal advice. Furthermore, I discuss British Law. The law may well be different in your jurisdiction, indeed in the United States of America, it may well be the case that Copyright Infringement is one of a number of crimes, all referred to as theft.
- The Theft Act, 1968 - http://www.lawteacher.net/Criminal/Property%20Offences/TA%201968.pdf
- The Theft (Ammended) Act, 1996 - http://www.hmso.gov.uk/acts/acts1996/1996062.htm
"A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and 'theft' and 'steal' shall be construed accordingly.
- 'Theft', 'Intellectual Property' - wikipedia - http://en.wikipedia.org/wiki/Theft, http://en.wikipedia.org/wiki/Intellectual_property