Edit: And please, let's not use such inflammatory headlines as "PC gamers are showing their gratitude for Stardock's approach by pirating it up the wazoo". That doesn't help the cause, and is also misleading. I expected better of the Escapist.
While this is obviously a terrible event and saddening to see happen, let's just keep in mind what Stardock's CEO, Rob Wardell, had to say regarding the subject, before we all bust a nut over how pirates kill/will kill/killed Demigod (mind you it's been just 2 days since launch):
http://draginol.joeuser.com/article/303512/Piracy_PC_Gaming
Now, I don't like piracy at all. It really bugs me when I see my game up on some torrent site just on the principle of the matter. And piracy certainly does cost sales. But arguing that piracy is the primary factor in lower sales of well made games? I don't think so. People who never buy software aren't lost sales.
Now, obviously some of what he said should be applied to the game on a case-by-case basis. Sins has a very strong singleplayer mode and doesn't rely on online-only play as much as Demigod does. Also, Gamestop released early, which also meant that some of their network architecture wasn't quite ready, in addition to the glut of illegitimate users clogging up the network.
He also posted on his blog recently (March 3) about the very subject:
http://frogboy.impulsedriven.net/article/302494/PC_game_piracy_hurts_us_all
I don't like DRM. But the pirates are ensuring that our future is going to be full of it because at the end of the day, the people who make stuff are going to protect themselves. It's only a question of when and how intensive the DRM will get. And that's something only the pirates can change -- if you're using a pirated piece of software, either stop using it or buy it.
Obviously, Stardock makes its games with this in mind. A game with no copy protection is sure to be pirated to some degree, but does a game WITH terribly invasive DRM avoid getting pirated? So far the answer is a resounding no. Piracy DOES hurt, and DOES encourage the use of DRM, but DRM still isn't the answer, and Stardock knows it.
Was Demigod hurt by this? Clearly yes, given the way it was designed (i.e. multiplayer-dependent). Should it have been designed differently with this in mind? That's up for debate. It still has a strong offline component, also. Sins has no campaign, either, and it was one of the best-selling and most profitable titles of 2008.
So what I'm saying is "don't jump on the bandwagon just yet". There are a lot of things that factor into determining a game's success or failure, and piracy is almost never the PRIMARY factor.
Am I justifying piracy? No. Does what I've just said mark me as a dirty pirate trying to rationalize? That's up to you to decide. All I know is that I'm happily playing my copy of Demigod, which I bought off of Impulse, but am staying off the servers until it works out, which it will.