This generation of games consoles does more than help defeat piracy for developers. It provides every user with a standard interface, most of them are based around PC architecture inside, which makes developing games easy, and all you have to do to play the game is insert the disc.
Again, speaking from personal experience, that last statement describes my situation very well.
Five-plus years ago I used to be a die-hard PC gamer. I disdained console gaming, wrote it off as silliness. But as time went on, I got tired of having to learn new tech every year or so in order to make intelligent hardware buying decisions. I got tired of having to plunk down cash every other year to upgrade the computer in order to run the latest games in something resembling decent quality. I got tired of having to mess around with updating video drivers and other assorted stuff in order to get some games to run at all.
A year ago, I finally made the shift: I bought an Xbox 360 console. And I haven't regretted the decision at all. In fact, it is, by far, the best entertainment dollars I have ever spent. I've gotten my money's worth and then some. I can now just pop in a game disc and play. No compatibility issues, no driver issues, no insufficient hardware issues, just place-in-tray-and-play. I can also now game from the comfort of my couch rather than sitting at my computer desk, which is another benefit.
Getting games is also easier. No longer is it either full retail price or nothing (or illegal download) as with PC games. Now, I can rent, wait awhile for a discount, or buy used. More price point options allow me to make the most of a limited gaming budget.
Another reason for moving to console is some console-exclusive games. For example,
Gears of War 2 is only available for the Xbox 360. Being a devotee of that particular game franchise, it tilted my preference towards console gaming.
I did have some trepidations about having to switch from keyboard & mouse to gamepad, as I loathed gamepads. But now, after a year, I've fully made the transition. Certainly, gamepads have some issues and are not as good as keyboard & mouse, but if I can make that switch, anybody can.
So, long story short: is illegal downloading part of the reason for the decline of PC gaming? Certainly. Is it the only reason? Far from it, as my own experience indicates.