I don't agree with fining someone 500$ for something that costs 10$, they should just make you pay the original price and if you don't, then they fine you. But that wouldn't make sense.. But then again, charging 500$ for something that's 10$ doesn't either.
The reason why the inflate the fine is from times before computers. If someone, for instance, was going to copy a painting, most likely they were going to sell it in effect committing plagarism. The large fines accounted not only for the crime, but also profits the criminal most likely gained from breaking copyright law.
Now, because copying any digital takes a matter of seconds and very, very few of those copies are sold for profit, a separate set of laws need to be established for digital content. Effectively, it could be summed up by two clauses:
1) Knowingly distributing digital, copyrighted content on a public network without a license incures an fine of $5,000 and requires filing for a license.
2) Selling digital, copyrighted content without a license incures a fine of two times the retail value of the content. Possible incarceration for up to five years.
#1 protects those that had their computer sucked into a drone network, consumers right to backup data, and the various transactions that are ongoing in a computer. It also protects the publisher by forbidding people from distrobuting content at their own whim thereby defeating the purpose of a publisher.
#2 makes it strictly prohibited to sell someone else's content without a license.
Such a law would need a "consumer bill of digital rights" appended to it.