It's not even a logical assumption in the first place — just one that the _AAs have tried very hard to push. Look at any paid product's conversion rates and then try to say with a straight face that every illegal download is potentially a lost sale. The "potential" is extremely low, similar to how every trip to the supermarket is a potential mugging. I would guess that only one in fifty is even potentially a lost sale in any meaningful sense. (And that's not even factoring in the converse truth that some percentage of piracy actually amounts to gained sales from the pirates either paying for a later version or getting their friends to do so)

Regardless of your stance on piracy, the "illegal download ≅ lost sale" numbers are not remotely reasonable.