It isn't like they have time to watch every person who downloads something.
They don't have to. That's what computers are for. This idea will clearly target the main offenders who are downloading loads of things for free.
Except nobody downloading loads of things for free is stupid enough to do so on an unencrypted connection. That would be like breaking into Scotland Yard from your home line - anyone smart enough to figure out how to do it, is not also stupid enough to do so from their house.Besides which, chances are good you're going to get a lot of people on bot nets banned, which again is fine by me, but probably not so fine for some Windows user who just got their connection jacked.