A couple things....
1) Microsoft has had a great effect on the PC gaming industry. You want some difficulty, then look to PC gaming of early 90s, before Direct X. It was regular to see games only work with certain hardware pieces. Now a days, it is much easier to take care of.
2) I have been running a 9800 Pro for three years now, and I have no problem running the lastest games with most of the details enabled. (BF2, Rise of Legends, COH, WOW, MAdden 06, I even have Oblivion, Quake 4 and Half-life 2 running.)
3) Piracy does have a strong impact on the industry, and I can back that with my experience working in computer support, game retail, and game development (two of the games above, list my name in different departments

) I can remember working at the Geek Squad and seeing so many machines come in with so many games that were cracked and while that might be legimate, this is a strong pointer to piracy. It is said because more people feel that they deserve these games for free and that is not true.
4) You can play most games online, with pirated versions, either through private servers, direct connect, or some games use the policy of kicking if two games have the same key on the server, not in the whole system (BF2 is a good example)
5) Most patches do not launch because of known software issues, it is really the conflicts that occur between when the game goes to duplication and it is shipped. One, maybe two, patch tuesdays may occur. Graphics drivers might update, network drivers, all the different components are important and can effect performance. But half of the challenege is figuring it out, because with each challenge comes knowledge, I can say for a fact that my troubleshooting in the beginning is responsible now for two large technology companies fighting over my contract.