Does the use of P2P technology mean that consumers will lose out on content – or that the total quantity and quality of such intellectual material will decline?

No – it means that the creation and distribution of such content will be democratized – thus more variety and more choice for consumers.

The only losers are existing institutions with outdated business models – and artists who choose to distribute their material through these channels.

This looks like the PGP/certificate issue – by trying to shut down torrent indexing sites in the US – the courts will open the way for such sites outside the US.

Do the US courts wish to bring about a repetition of the Thawte scenario?

^^ From somewhere in the beginning comments.

By that logic, earth if flat if enough people think it’s flat. Just beacuse majority of the people who use it for illegal purposes doensn’t make the whole thing illegal.