What price infringement?

The mother of a teenage girl who serves and downloads music online is being charged £4000 for her daughter's infringement. This seems to be part of a clever strategy by the music industry to attack P2P networks (I will talk more about it next week after I have presented my ideas at this conference).

What I can't possibly figure out is how the music industry calculates infringment. It is very difficult to calculate damages in an online environment because a song downloaded does not equate a lost sale. Another problem is that the price for "legal" music downloads has dropped considerably, and I honestly think that this should be taken into consideration when attempting to calculate damages. For example, Napster.co.uk gives users unlimited amount to music for £9.95 a month. Music is becoming cheap, why isn't this taken into account by the lawyers?