Quote - but here is where I am missing the point a pirate would not be stupid enough to give over an invalid product key unless he was dumb as a turd and obtained it from a pirate lol

Luckily, they will not have to. The pirates, of course, can ask anyone for a valid product key as well. In order for this system to work, the companies surely must relax their policies with the product keys a bit, and at least allow their customers to give it to Tom, Dick and Harry, and - as you said yourself - there is nothing illegal about asking for a product key.

Does not mean this is too absurd to be done, though. The internet is large enough to have room for trying out even the most crazy ideas. Some of them just might work out.