All that means is that in the analogy, you set the "cost of replacement" to factor in the cost of friction. You have an Hermes store factory and the $1,000 covers not just the cost of raw materials for the bag, but the labor to produce it, and the cost attributable to not having another item until the next shipment.
This is where your analogy retreats into a kind of magic that distracts from the issue. You magically assume that $1000 compensates the company, the distribution pipeline, and the store for all of the lost opportunity of a missing item. This cost varies depending on how many items there are, what space the item is taking up in the store, where the store is located, the time that the item is being sold, etc. The assumption that this is supposedly all wrapped up in a sum 1/10th of the sticker price, while at the same time trying to use the disparity between that sum and the sticker price as moral leverage for the analogy, makes the analogy seem very dishonest.
There is nothing magic about the process. There is a number that represents the replacement value of the item, and it's computable. I pulled the number $1,000 out of a hat. I don't know what Hermes' profit margin on each item is. I assume its high, in that price >> replacement cost. I use that not as moral leverage for the analogy, but because digital products have a similar situation where price >> replacement cost.
My point is that it's ridiculous to make a categorical distinction between digital and physical goods based on the premise that digital goods have a zero replacement cost while physical goods have a non-zero replacement cost. It makes it seem like as long as a producer is not out the replacement cost, then stealing a product is okay.
I'm not talking about the cost to replace the item. I'm talking about the lost opportunity to sell the item for profit to someone in the target market. You pull $1000 out of a hat, much like a rabbit, but to assume that it factors in the whole opportunity cost of an item that can be sold for ten times that begs the question of the analogy.
Think of it this way. If, during a peak holiday shopping weekend, a thousand people not in the target market descended upon a store and replaced all of the bags with their strict cost-to-eventually-replace amount, this would be a major blow to the company's expected revenue. The same scenario does not hold for digital products. A thousand people could pirate the digital product, and as long as the pirates are not in the target market (an assumption made in these analogies so far), there is no analogous loss of potential revenue.
