You are correct. It is not theft, it is a copyright violation. I love how these fools think that using the word theft makes it sound so bad. They are living in the past and can fight the future all they want, but it won't change the facts of life - the old distribution system is DEAD.
Of course it's theft; you download someone's song without paying for it. If you went into a record store and stole the artist's album you would get thrown in jail. Why does it change when it's on the internet? If actually paying for something instead of stealing it means I am living in the past, so be it. The future doesn't look so good.