> Also, that's maybe the one part of this discussion that can't be debated.
You are correct; it is absolutely, undebatably not illegal, in and of itself, to own a copy made in violation of a copyrightholder’s rights under US law.
If you think it is, here’s what you need to do: cite the law. In American law, everything not explicitly forbidden is permitted, so if mere possession of material made in violation of copyright is, as you claim, illegal, you will be able to find a provision of law that actually says that. (You won't, because its not.)
Now, there are important legal issues that effect possessors of illegally made copies—if its something like computer software where copying is part of normal use and implicitly or explicitly licebmnsed for lawful copies, you can’t make that kind of use of your illegal copy without violating the copyright holder’s exclusive right to make copies because you have no license for that copying. And you don’t have first sale rights in your illegal copy even if you own the physical medium in which it is embodied. And so on and so on.
But possession itself is not illegal.
> The courts have clarified that violating intellectual property is still a denial of owed compensation (theft),
That's not what theft is.
> but instead prefer the term "infringe" to make clear the distinction between violating physical rights (criminal) and violating intellectual rights (civil).
This is nonsense, and absolutely not something courts have “clarified” (or something anyone with even a passing familiarity with the relevant law could say with a straight face) since IP (including copyright) violations can be criminal as well as civil (see 17 USC § 506) and physical (real and personal) property rights violations, like IP, have sets of civil violations that generally are of broader coverage than the more narrow crimes (e.g., the torts of trespass, trespass to chattels, and conversion).
> It's still a violation of copyright to be in possession of works obtained via illegal reproduction.
No, its not: Title 17 lists the exclusove rights associated with copyright, enumerates violations, and provides remedies, and possession of copies is not an exclusive right in copyright, possession of unlicensed copies is not a violation (though it may be important evidence related to actual violations), and, consequently, there is no legal remedy for such possession.
> You have zero fair use protections for illegally reproduced content.
That's a whole different issue.