Clearly the solution is to spend months inventing a new scheme for each game.

All true. ;)
Part of me hopes 360 piracy gets worse...

360 piracy, only thing you can't do on 360 is Live and so many people are addicted to Live like crack, even a guy up the street. He's always messaging or posting his stats or whatever, he's just on his 360 half the time playing games half the time fiddling with Live. One of my friends is getting there also, so it's not an isolated incident.
I hope 360 pirating gets worse......... Just to prove consoles are worse, once a console game is cracked then all games can be downloaded and burnt immediately. It was harder back in the day of cartridges because not many PC's could read an SNES cartridge to make a ROM. Though the few that could gave us every game on the market to play on ZSNES..................

Because game publishers, such as Ubi, have reacted so favorably to piracy up to this point :P? no, no, I get your point, and I agree with the sentiment. I just don't think it would be good for the gaming market at all. The more piracy, real or imagined, the publishers see, the less money they will be willing to dump in to games OR the more money they will be forced (in their thinking) to dump into horrible DRM schemes. Neither alternative seems good for gaming as a whole.

Could be a sign that the game market should either evolve or keep going down the current road it's on and die off. Tons of companies lost over $200 of sales on me due to their practices, 4 games. COD4, COD5, MW2, and Silent Hunters 5. There are other games I would've bought but didn't due to DRM but the number is staggering and I can't list them all. Egosoft was hurt in it's initial sales by it's DRM, many players didn't buy X3:TC until they patched out the DRM like they promised, but the game was $30 by that time so they lost $20 per sale on everyone who waited for TAGES to disappear from X3:TC.
DRM is just destructive, it takes resources from the games themselves, it hurts customers who manage to buy the game, scares potential customers who are smart and don't buy and loses those sales. In effect DRM just loses money for companies, they just fool themselves into the mentality that stealing is stealing, even it it's someone who wouldn't buy anyway. As I said, the industry needs to either evolve or die. I'd be happy with either, because if it evolves we get a golden age. If it dies, the companies are gone and gaming becomes a free art again.

It is cracked and it is available in many of those dodgy shops in Malaysia or even legitimate ones.
Malaysian government seldom give a damn about pirated DVDs / CDs unless there is nudity or intercourse in it (especially when the show / movie involved politician in a sexual act eg. Mr Chua)

If they do manage to (and they probably can, seeing as the DRM code is probably similar) I will buy it.

Ain't that the truth. Funny how their rival, Sony, are also responsible for drumming up fear of PC piracy through their promotion of secuROM. Nah, must be a coincidence. :P

What you hit on in the first part of the statement is the crux of the problem. Companies don't behave rationally to the piracy issue. Whether or not you, personally, think that all piracy is actually stealing, the companies count all if as a lost sale (sometimes count it more than once!). The do this so they can use it to explain to shareholders why their earnings are lower than expected.
Most shareholders don't care about the games themselves, they just care about dollar signs, so they clamor for more protection of sales. Thus, the company does as the shareholders ask, and make tougher DRM. Sales go down because of the draconian DRM, the shareholders bitch, the company adds more DRM, and the cycle continues.
Even when it is obvious that the DRM schemes are having the reverse effect as intended, the companies will still fall into the same trap. The shareholders don't actually care enough (usually) to get the entire story, and the companies themselves are not going to admit to their shareholders that they were mismanaging the company for years (that is a surefire way to get fired).
Call me a cynic, but if perceived piracy grows, I think fewer games will be created. While in this age of digital distribution, a publisher isn't actually required, there are some advantages for developers to sign up with publishers (funding, less downside risk, etc). A developer may think twice about risking their personal financial solvency if they believe piracy is going to severely limit their financial upside.
This might not be a bad thing. as you believe. Perhaps fewer games, focused more on game-play and story quality rather than big budget graphics, might breath new life into the industry. My only stand is that the more perceived piracy there is, the less chance of potential game developers sticking their toes in to test the waters.
EDIT:
For the record, I think Assassin's Creed 2 was a really good game. I liked the story, as crazy as it was, and the game-play was challenging enough to be fun. I truly don't want games like this to go away because of anti-customer DRM schemes. That is why the piracy/DRM cycle gets me so riled up.