Notch's success and that of other indie developers don't support the claim made by most game studios and their publishers that the weak market and rampant piracy is forcing them to take drastic measures.
If you look at Minecraft, it has the worst graphics possible and, in the Alpha that Notch is selling, half of the features don't work in multiplayer. The main thing the game has going for it is its limitless replay value with the ability to create and show off things (however tedious I think the average person would find the process).
Despite its flaws, Notch seems to be doing something right. He doesn't have much overhead and he can sell the game for cheap (although not very much so by indie standards). He doesn't even have an effective copy protection scheme. The login system is easily bypassed, and multiplayer servers hosted in "offline" mode are no different from a regular server.
Granted, there are previous incarnations of the game that did not take off and Notch has a lot of open promises about what he will deliver with the game. Yet, the game is in a state that is highly addictive and people have nothing but good things to say about it. Word of mouth and social media (namely youtube tutorials and showcasing) have rocketed sales.
Obviously, this game is a different caliber than most big budget games, but they are at a disadvantage to Notch's straightforward development style. Game studios are often rushed to finish their game and they need to see immediate success upon release. Yet, they are almost always still working out bugs. Beyond patching and token DLC, the game is considered final. Some games have even lost modding support despite how much value that adds to a game.
Blaming the current generation of consumers doesn't fit. There is an exponentially larger consumer base buying games. Most gamers are always ready for the next game and often games are sold on hype alone. Maybe this is an overstatement, but we have attained what is close to rabid consumerism. There is a lot of competition, but when a game hits, it sells big.
Could it be that there is something else rotten going on in the games industry? Look at the surefire success that is the Call of Duty series (even despite the supposed boycott). Activision apparently couldn't afford to properly take care of Infinity Ward and there was a huge falling out. Can this be explained by greed, incompetence, or what?
Even if piracy is to blame, games are already harder to pirate. You can probably fight it head on to a certain extent, but I doubt you can stop it. At some point, it will hurt business more than it will help. The type of article Notch has written here has become fashionable among indie developers. It makes them look good, while making big game studios appear to be at a loss. Maybe they are also trying to serve as an example of how you can rise above piracy concerns rather than getting hung up on them.