That's a pretty common and pretty crummy way of going about defending your intellectual property.
On the other hand, I respect that they want to do
something about piracy, especially given the numbers they recently released, and I'm having trouble imagining a better solution off the top of my head. There are only so many ways to identify people online, and dragging them into court proceedings to discover responsible parties probably won't cost the hapless address owner less than demanding an out-of-court settlement.
Not saying it's right or that I endorse the practice (neither is true), but I also think they're between a rock and a hard place with regard to piracy.
Caffiend: I'm under the impression this sort of thing is usually handed off to a legal firm, at which point the development company pretty much washes their hands of the whole issue. While it's happening with the tacit approval of CDP, they're not actually knocking on people's doors and saying "Give us a grand, you robbed us, fool". Even if the article is accurate, the rage is misplaced.
That might actually make it worse. Depending how the firm is paid for their work, they might have an incentive to fire off demands indiscriminately.