I understand, and I'm guilty of it too, but it's the truth.. I've downloaded many movies but I also try to buy when I can and I realize that not everyone is in the position to do that, that the movies are probably overpriced when they are just digital downloads and are the same price OR MORE as the the physical media if they were in Japan.. and that for most people outside of Japan paying for a digital download with DRM that has to be played in a proprietary player isn't very attractive to say the least..
Totally right. I too download the vast majority of JAV i watch. Probably 99% of the stuff i watch i pirate. The 1% that i do buy tend to be from my favourite genres or actresses, usually through R18. I don't know just how much of my payment goes to the actual studio and how much is DMM's share. I remember asking R18 over on the DMM thread and he replied that it all depended on which studio. The bigger studios get a bigger slice of the pie i guess.
To answer the OP, i would say no. I'm more than happy with how JAV is right now and like where it's going. I'm a big fan of movies which have a strong narrative, so studios like Nagae style, Fa pro or Jet Eizou are doing very well for my taste. The latter also brings me onto NTR movies which seem to be everywhere right now too.
I have also seen an increase in the 'danger sex' genre. Not physical danger mind you, but movies where a person is cheating on their partner while they are close by. The danger factor comes from the fact they could easily be caught at any time. Therefore, in terms of what i like and enjoy, things are looking good.
There are still a lot of r***, incest and loli movies being made. I actually think they are increasing, not decreasing, their output so i have to disagree with the OP's view but maybe it is only happening to certain types of movie that he enjoys. I don't really watch 'extreme' JAV so i'm not in the best place to talk about that. I guess bestiality is the only thing that has completely disappeared.