1) As stated above, if you only have one copy of a title, no one is going to bust you.
2) To the last poster. Paramount is more than aware of the situation and has been for the last 10 years or so (VCD's before DVD's). The MPAA has offices that do nothing but monitor this.
3) DVD piracy in China is a bit different than other countries as far as the studios are concerned. You see, the Chinese government only allows ten official theatrical releases of Hollywood films each year. Therefore there is a great pentup demand among Chinese young people to see western films. That added to the fact that certain titles would never be allowed in China (like Richard Gere films) helps explain the popularity, and the "lack" of studio action.
4) Only newbies and foreign teenagers buy the absolute latest releases. Why? Because as stated above, many are DV cam versions of the films in question and are total garbage. Those that want good quality either wait until the real DVD release comes out (at which point copies are perfect), or better yet, but the DVD9 versions which are more expensive.
5) 1$ is way too much, the going rate in China is about 80 cents.
6) While the whole IP thing is a real argument, as noted above, it is not as long as its the Chinese are buying them and they stay in China. If a million copies of Kill Bill are sold in China, it has no effect whatsoever on the bottom line of the studio, because there are absolutely NO LEGAL SALES whatsoever of the film. 1) Because it is too violent for their censors, 2) Because it wouldn't make it past the quota even if it were not too violent (Studios would prefer to release safer things like Shrek 2 or Troy), and 3) due to the low real per capita income in China (appx $980 pp) they don't even bother releasing these things at real prices (yeah, there may be a store for foreign diplomats in PEK that sells them, but that is about it).
7) An interesting note. In Russia they let this stuff run loose for years and last year a couple of studios started marketing Russian version DVD's for about $4 a piece. They are grabbing huge market share. In Turkey the studios did the same thing with the VCD market. The point I am trying to make is that believe it or not this grows market share and the plan is only screwe when they are "exported".
8) Last note. many of the HK pirate discs ( Meaning HK movies, Canto-pop, etc. -DVD's, VCD's and CD's) are actually pirated with the complicity of their record companies or producers. They guys are often "connected" and conspire to knock off product in order to screw the artists and the tax man at the end of the day, much like what occurred in the US in the sixties with LP's and singles.