Yeah, we've heard this before, but I suppose, if there's nothing to pirate, its sort of QED.
FTA: blahblah...
Perry's idea is already in the beginning stages of appearing in the West; EA's Battlefield Heroes is set to release as a totally free download, and id is currently beta testing Quake Live, which is fully funded by in-game advertising.
I think this model will work in the long run, but it'll take some getting used to.
Link:
News: Free games will beat piracy, says Perry - ComputerAndVideoGames.com