Charging for pirated music is wrong. If someone steals a copyrighted work, and turns around and charges someone else for the work it's wrong.
I pay for music, I assume it's legally mine. If I purchased something and found out it wasn't mine, I'd be pissed. I'd nail the fucker to the wall, I'd send law enforcement after his or her ass.
Charging people for stolen MP3's is no different than charging people for any stolen good. If the person knows the work is stolen, I feel that act is a crime itself. For example, if I buy a TV off the back of a truck, I know it is most likely stolen. I know I am buying stolen goods. I know that I am committing a crime.
Now is music, art, books, etc... really property? Yes, it is. Most nations have copyright laws to protect intellectual property for a reason.
Movies, music, etc... are licensed to individuals through the sale of media. I do feel that I am purchasing a license to the content. I don't feel that labels and movie studios should prevent me from enjoying the content I paid through. I don't agree with copyright mechnicisms that prevent some operating systems from playing a disc or keep other DVD players from viewing a disc, etc... Such behavior gives whiny 13 year olds yet another excuse to pirate the material.
Now I won't say I haven't pirated music before. I did and I stopped because digital music services appeared and give me little reason to bother. I never burned my entire MP3 collection (which would have been several discs) and sold copies to people on the street for five dollars.
If we want to stop the RIAA from getting a cut on blank CD's and cassette, don't pull stupid shit like create a pay music service for pirated music.