Comparing freemium game conversion to Triple AAA piracy is ludicrous, and the argument that a freemium game should convert more because its designed to convert people is the most textbook definition of a specious argument I've ever seen.
Successful Free-to-Play games like League of legends are suspected to convert greater than 10 percent of players to paying customers. Of the millions of players who pirated Bioshock infinite, I seriously doubt that only 1 percent could have afforded to pay for it and had a desire to play it.
In all honesty, I gave the %1 number based purely on my own experience. When I was a kid/teenager, I didn't have much money and I certainly didn't have a way to buy things digitally (debit or credit card). So I pirated games that I wanted because that was the only way I could get access to them. And so did the people I knew and interacted with.
If we couldn't pirate something, we just didn't ever end up playing. It seems like the amount of money any one person will spend on games/gaming is very stable. So what game devs are really trying to do is to be a part of each of their customers game-spending pie. I know that's how it is for me and the people I interact with.
You also have to take into account those that are pirating anything in sight and might only have a slight interest in playing if they every get around to it or might play for half an hour.
These people count towards the piracy number on hundreds of games yet would only ever buy a small fraction.
His post uses a freemium market of gamers who are predominantly either too young/poor for a credit card or too casual to attach to a game to draw his conclusions against buying realized products targeted at core audiences (and I say this because the biggest torrents are all for core-targeted games).
XBLA had an 18% conversion rate in 2007, and it's hard to say with a straight face that it'd go down. 2010 saw Ken Lobb (MGS) citing 20% to 40% rates in interviews for in-house games. These aren't perfect proxies for PC piracy but even if it's halved when you jump from console to PC, the 1% value just doesn't make any sense.