They did. By lowering the price. I used to have 2 PC's running pirated copies of windows. Not anymore, they are both running Windows 8 I purchased at a reasonable price of 39.99.
I do have Windows Vista OEM licenses which give me the right to upgrade to 8, just no windows 7 licenses which i used to run 'illegally'.
But I believe Microsoft knows what they are doing, cause the upgrade assistance does not check if you are running a legit version. It either means they were too trusting that users will be running legit versions before upgrading or it means that they deliberately left this hole in order to get a revenue from users who would otherwise just install a pirated version of their new OS.
It seems to be really hard for any big company to be "OK" with piracy, even if that company wants to get its software in as many hands as possible. They simply crave control. This is even somewhat reasonable, as pirate versions may be unreliable in ways that the official version isn't, thus giving a bad impression of your software. They would rather just sell the official version dirt cheap.