I must be misunderstanding your proposal, because on the face of it that seems to be so colossally ridiculous that I can't believe it is what you intended. Did you misstate your proposal?
There would be virtually no disincentive to infringement under that proposal. Why not just propose eliminating copyright?
Not that I agree with his proposal, but youre assuming that someone wouldn't pirate something that they weren't willing to pay money for. That almost certainly isn't true for a significant population.
Not having to deal with court, which could be a significant time and/or money drain. I agree that that isn't a huge disincentive, though. I think that money and effort would be better spent going after producers of infringing content instead of users or distributors.
I think that making it harder to come by the infringing content by going after the people who produce it is a better way to fight this problem than going after everyone who wants to use it.
There would be virtually no disincentive to infringement under that proposal. Why not just propose eliminating copyright?