I used to be in a fansubbing group (Toriyama's World, the brief run with Death Note), and I agree that fansubs, as a whole, do hurt the industry. However, it's the price of the series which cause the most damage.
Here in the states, we get to watch TV shows for free (well, as in, we pay for cable, but we don't have to pay per show), and with Tivo and DVR, we can tape stuff and watch it at any given time. But the DVD sales for these US shows don't suffer, and fans of the shows still gobble them up like mad, despite also being able to stream them off the net. Most likely because boxsets are 30-50 dollars a box, not 100+ like on some anime titles, yet still contain roughly 24 episodes. We don't get shiny trinkets, but that really doesn't matter, does it?
My point is, if they had a way for people to watch anime in a much simpler fashion (Viz had a great idea, with the Death Note subs available for download, but making us pay for it was wrong), such as a channel running relatively recent series with subs, then released the shows BY SEASON at a reduced price, then people would buy.
I bought Excel Saga, Samurai X OVAs, Full Metal Panic, and Neon Genesis Evangelion boxsets before, the laster being thin packs with no extras. Excel Saga was near 90 at the time, and Samurai X was 75, neither of which came with extras. Full Metal was 75, while Neon Genesis was 50, on sale at Bestbuy. Either way, in each case, I only got 24-26 episodes per series (6 with Samurai X), with no extras, and spent time and a half or double the cost for an american sitcom season, which could run for another 9 seasons. I'm the proud owner of the first 5 seasons of Scrubs on DVD, each one of those setting me back 30-40, but not complaining about those in the least, despite having watched them all previously on the TV.
With better marketing, more dedicated channels, faster releases, and slightly reduced prices, the dubbed series would flourish, despite the constant downloadings and fansubs.