Having talked to other developers who have also worked on indie games I think there are multiple factors.
For a lot of releases with no piracy your game will simply slip under the radar, you're competing against companies with far bigger advertising budgets, who can churn out any crap with limited gameplay but high value visuals and reviews which are for all intents and purposes paid for, completely glossing over any flaws in the games. This seems to have one outcome
a) Nobody notices, nobody cares, practically no sales.
For anything which catches enough peoples eyes there will be a level of piracy, this seems to go two ways.
b) people pirate your game, decide it's good, talk about it, it ends up being mentioned everywhere (social media, reviews etc.) more people pirate it, but people buy it as well. Even if 20 copies are pirated for every one sold you're still selling more than if nobody had noticed your title. Those 20 people wouldn't have been your customers before, but are essentially free marketing drones.
c) people pirate your game, decide it's crap, don't recommend it to friends, and post damning reviews of it. In this case, yeah you probably won't get any sales
There is another outcome, but that is simply to get lucky, some games go viral, attract a cult following and sell massive numbers. There's no real science behind that, sometimes it just happens like all the not-so-funny internet memes. Planning for that to happen is just bad business.
This is how things work with digital downloads at least, of course when you're dealing with limited runs of physical games which are practically guaranteed to sell out then I'm not sure why you care too much about piracy in the first place. If you've sold all your stock anyway you've lost nothing, and if you're offering people special packages with lots of bonus physical items (posters, booklets, development artwork etc.) then they're getting real physical added value anyway, something which downloads can never offer.
Fast Striker, honestly, I saw some screenshots and videos of it, I personally deemed it not even worth pirating, sorry to be blunt, but it didn't look like it had anything to offer over games which are legally available for free anyway. Even the new one, despite looking rather cool for a Neo game is just Turrican, which incidentally Factor 5 offer for free
As discussed in other threads shooters don't have much value to the mainstream, people buying them for PCB shop prices are already hardcore collector types, not the ones who think $5 for a shooter is too steep. Arcades buying them are already going to see them as a risky purchase if they don't see much interest in the genre and are likely to see them as too pricey to fit an aging old cabinet with unless they know there is a following. Emulation and piracy isn't going to make a great difference to either one of those scenarios.
Ports are an area more likely to be affected, but again by offering a package which seems good value (which as I've said, the RSG Deathsmiles package was) then you're giving people reason to buy the games regardless. The emulation in MAME is incomparable to a well done modern port offering bonus features and the like, and pure arcade ports haven't done well for a long time now regardless of emulation (one of the big problems with the Dreamcast is that most of the titles were direct arcade ports, and the buying public were no longer interested in direct arcade ports because they seem too shallow and lack content) You might get the occasional cheapskate who changes their buying habbits based on what is / isn't emulated, but for the majority of the population their mind is already made up and the main way you're going to lose customers is not through piracy but instead moronic sales tactics like one-time DLC, paid DLC for stuff which should have been in the original package, or region locking (be it physical or online store) I'll go out of my way and say the number of people who haven't purchased various ports due to region locking and uncertainties surrounding importing is far greater than the number who haven't due to piracy and emulation.
Also of note, a number of people I know purchased their own copies of Deathsmiles after I let them borrow my disc, they'd never even heard of the game before that, but after borrowing the disc picked up a copy within a week.
