IMO one should never be okay with automated fines of any kind, especially on the Internet. There is far too much potential for false positives, and too much difficulty identifying when a particular download is illegal.
Not to mention, there would be a very strong incentive for the hosts of pirated material to find ways of bypassing the fines and blocking their crawlers. Griefers will install malware on others' computers that downloads illegal songs just to incur $100 fines.
Think of a system that works much the same way as speed cameras work in some countries. You deter the majority of people from speeding in a particular area. You automate an amnesty into the system for certain types of vehicles (emergency services, military, diplomatic) but instead put a protection on publicly owned computers, libraries, schools and charities (which, IMO, should not have to pay for copyrighted works anyway and it is already too much effort to enforce). Create an independent arbiter to handle false-positives and exceptional circumstances without any direct connection to financial interests (a government, funded by the fines or industry funded). Send the remaining money to the copyright holder.
There is the same incentive now for blocking MediaSentry and the like, why would the change escalate this? Griefers already do this too but usually with material far more illegal than music.
The present system doesn't make sense. It should not be OK for a company to bankrupt someone over something that can be legally purchased for a minimal amount. Both enforcement and defence against enforcement are too expensive, time-consuming and economically pointless. Having an efficient system is better than having an inefficient system.
You automate an amnesty into the system for certain types of vehicles (emergency services, military, diplomatic) but instead put a protection on publicly owned computers, libraries, schools and charities (which, IMO, should not have to pay for copyrighted works anyway and it is already too much effort to enforce).
Simple workaround: set up an automated, anonymous service that pays all college students to run Tor endpoints in their dorms and libraries. Or, set up a charity that provides free Internet access to the poor, and use its spare bandwidth.
Create an independent arbiter to handle false-positives and exceptional circumstances without any direct connection to financial interests (a government, funded by the fines or industry funded).
You're talking about creating a huge bureaucracy with this system. That's not the kind of make-work job creation we need. Besides, we already have independent arbiters in the courts.
Having an efficient system is better than having an inefficient system.
Having an efficient system with false positives is far worse than an inefficient system with false negatives. I'm opposed to speed cameras for the same reason I'm opposed to automated punishment or automated surveillance of any kind: enforcement of laws should be person vs. person, as a matter of principle. Without the direct human connection, it is too easy for those with the power of enforcement to go significantly overboard.
There is no universal database of copyright information. The major copyright holders (major record labels, studios, etc.) are ridiculously complex to deal with already. Throw in minor publishers, and independent copyright holders, and what you describe isn't just difficult, it's impossible.
Not to mention, there would be a very strong incentive for the hosts of pirated material to find ways of bypassing the fines and blocking their crawlers. Griefers will install malware on others' computers that downloads illegal songs just to incur $100 fines.