There was a collection of DRM stories i read a few years ago. People (businesses, architects, professionals that should know better) calling for tech support over corrupted files was memorable (but apparently not memorable enough). I imagine there was some grim joy in informing people they were not using a legitimate copy, and thus their program was failing.
Degredation as a DRM mechanism sounds clever, and lots of developers think of it at some point (and many games have actually done it). It's actually a really bad idea, though, for a couple of reasons:
* Your support site will be flooded by pirates experiencing the degredation if it is severe enough to be noticed
* People will just assume it is a bug and your game sucks if it's subtle
* If it's very blatant it will be removed in the pirated versions. Meanwhile you run the risk of it happening to legitimate customers due to bugs in the DRM.
Why should you care that pirates think your game sucks? Well, for one, on the great democracy that is the internet, pirates' game reviews have just as much weight as legitimate purchasers. Also a pirate is not necessarily always a pirate, they may be trying before they buy, or may convert to a paying customer later in life and remember their experience with your company.