Wait, so I just tried the link in the original post again and the Holey cube and the Mefferts 7x7 are no longer on the page. Did they update it and remove it or am I just having a bad day?
http://mefferts.com/page.php?lang=en&theme=new_puzzle_release
Read the thread?
http://www.speedsolving.com/forum/showpost.php?p=141071&postcount=71
Let's compare this to medicine: Doing enough research to cure a major disease might cost 10,000,000,000. If the resulting medicine would be used by 100,000,000 people every dose would have to cost at least 100. Production of that medicine might cost only 5 per dose
That means that a copy-cat could bring that medicine on the market for 10 and still make a big profit while the original manufacturer would need to sell it for at least 105 to break even.
In the short term, it would be very beneficial for the copy-cat (and all the sick people) to only pay 10. This would mean that the original manufacturer goes bankrupt.
In the long term, nobody is going to do research because of the fear for bankrupcy
(this example is looking purely from a financial point of view. Let's not get into a moral discussion about the balance between so many healthy people and 1 bankrupt manufacturer)
While we're speaking in hypothetical situations, let's compare to software. My company spends 1M currency units in labor/development/everything else. The actual software itself is irrelevant. It could be a game, or some office application, or some development tool. This software experiences wide usage. Distribution costs, say, 1 unit per transportation/license/disc/everything else. My pricing, as long as it is significantly greater than 1 unit is irrelevant.
Of course it gets pirated and cracked; as a result, a bunch of people get this software for free. Or people make copies and distribute copies of them. Either way, I make money off one copy out of all those people using them.
Does this mean I stop producing software? No, because there will always be people that legitimately purchase this software (such as, individuals, schools, government, other companies). Also, my company has the option to continuously develop this software, making it better than the illegal copies, thereby giving people a reason to buy it.
In the meanwhile, open source software or some cheaper alternative comes up and steals some of my customers. Look, consumer choice.
The fact is, the original product will generally be better than knock-offs (another example: retail World of Warcraft versus WoW private servers).
That said, while my example addresses yours, the puzzle industry is significantly smaller than either industry, and therefore I don't think either example really applies.