[Bush2000]

Wrecking the watermark is a lot easier than forging it -- only if you could forge it could you get away with piracy with no consequences. If you can merely wreck it, you will be in the position of someone who reads a ripped-cover paperback -- it's clear to others that you've gotten the product without contributing any revenues to the author or publisher and have participated in an illegal scam (even if your part in it was not technically illegal, you should have been aware that the person selling you the ripped-cover book was almost certainly breaking the law).

Agreed. But if that were your only option (as a pirate), it would be better than leaving the tell-tale clues that would lead the FBI back to the original source of data.

[VeritatisSplendor]

This paper is an example of the level of sophistication digital watermarking has reached. In theory, you can prove what the watermark is without revealing any information about how it is encoded.