Well, to be fair, applications do need a bit of protection, otherwise I'm afraid (casual) piracy would explode. I draw the line when the protection becomes a major problem for the end-user (insanely long serials, slow dongles, phone-home activation etc.)
Btw. afaik it took more than "a few months" before cubase was cracked, it seems like they (or rather, the protection company) came up with some really fancy protection. Not to mention that various cracked releases were pretty unstable. Pretty well done

- I'm not a cubase user myself though, so I don't know whether the protection slowed down stuff majorly, I guess I could ask one of my musician friends.
so, the people that make software know their product will be cracked - the crackers know they can crack it - the people that aren't going to pay for software know they can can get a cracked version.
But sometimes having to wait too long might encourage them to buy? Dunno.
Consider this... a program that has no protection at all. Admin has a license for 10 apps, but 12-15 computers to install to. It's a bit tempting to forget about the licensing issue. If there's some protection, even if it's easily broken, the admin would need to knowingly download+run a keygen/crack/whatever. I think there's a slight moral difference between the two.
would dropping the price of 'expensive' software make pirating/cracking less appealing? seems the software companies think not.
Good question. The hardcore pirates will pirate even if prices were dropped substantially, probably even if photoshop cost $10. Other pirates are more like collectors, they don't even install the stuff they download - those obviously wouldn't pay either, and shouldn't be included in the statistics.
Pricing is pretty complicated stuff, IMHO. Who's your target segment? What kind of cash do they have? How much do you spend on development? If you lower price by X, will the Y amount of new customers get you the same income? et cetera.
Then the piracy issue. A company might see that it's product is pirated, and thing "omfg we need protection". But really, even if "super expensive CAD program" or "very obscure and expensive medical imaging application" are released on the warez scene, how many people are going to use those applications? Does it mean an actual loss? I think the BSA and friends are way off when they estimate losses due to piracy...
I wonder how big an issue it really is. The people who whine most about piracy are the companies that make billions a year... would be interesting to hear what low-profile companies and shareware authors have to say.