Wow. This thread is a fountain of odd and inconsistent legal theories. I'll try to hit some highlights:
1. Just erase? No!!!. Putting aside whether Time Warner has other evidence, the filing of a lawsuit essentially freezes the parties in time. Destroying or otherwise disposing of materials that a party knows is relevant is to a pending lawsuit is an absolute no-no.
2. Prosecutors and public defenders? No. In a civil suit, there is a plaintiff(s) and defendant(s), whereas in a criminal case it is state v. defendant or U.S. v. defendant. The law enforcement arms of the state and federal government (i.e., prosecutors and public defenders) have no part nor can a defendant ask for a public defender. However, as one post suggested a legal aid society can be an excellent source of legal help if the defendant can't afford a lawyer.
3. Internet downloading versus shoplifting? This presents an interesting problem. Internet downloading, could theoretically be prosecuted under state laws against theft (along the shoplifting lines), but you could also be prosecuted under federal laws because almost all transactions of this sort occur in interstate commerce (i.e., across state lines).
4. Civil causes of action? Although I haven't researched this issue, I recall that the various digital content protection laws enacted at the federal level are what really helps the Time Warner's to sue "distributors." As many have mentioned, its probably the subsequent redistributing of the movie through the kid's sharing program that got the attention of Time Warner and not the downloading. And here is where the burden of proof gets more complicated. Presumably Time Warner can prove that this kid's copy of the movie was downloadable for x number of days. A question at trial, that might tip the scales one way or the other, is whether or not the kid knew that he was allowing the movie to be redistributed. If he had no idea, then a judge or jury might look at the actual damages caused (i.e., it was downloaded a 100 times so you owe us 100xretail price of movie) versus other potential damages available under applicable statutes or through the punitive damages process. One thing to keep in mind is that the plaintiff's burden of proof in a civil matter is a "preponderance of the evidence" rather than the "beyond a reasonable doubt" standard used in criminal trials. Thus, it takes less "proof" for the plaintiff to win its case.