Because that is the true reason behind the massive piracy of Office: since it’s virtually a standard everyone needs it (I know there’s openoffice and free aternatives, but the general public doens’t know or want that), but the prices MS asks for office are WAY too high. Thus average Joe and your every-day housewife ends up using illegal copies of Office which they usually got from a friend of a friend :)

If MS would make it more affordable (With that I mean a standard suite with Word, Excel and Powerpoint for sub 100 euro/dollar) piracy of Office would drop with at least 60%. Another option is this: a free basic service, because most users only need the basic functions.