What about, instead of targeting people who want to be legit but don't achieve that 100%, you create an initiative for people to DO remain warez-free?
I would imagine that there could be something set up something like the One Synth Challenge, where people can only use free or very inexpensive software for projects that are then voted on. That way you get people that are genuinely interested in making interesting (subjective, but "good" is TOO subjective) music, or even, as Michael said, sound designs.
No, you wont have all of the great features of a higher-end host, but people can still make music on free or inexpensive hosts.
I just don't think that any use of warez should be rewarded, even if they say their hearts are in the right place. If a person's heart is in the right place, they wouldn't use warez to begin with.
An initiative to keep people from using warez in the first place should be the goal.
