Thats lot of games. How long did the DC run from? Still dont know why sega killed it??? 
Sega didn't kill it. The ratio of pirate games to legitimate games was around 10 to 1 (thanks to the console not needing modding to play backups). It's a bit hard to convince developers to release games for your platform when it's going to be ripped off and put on a public warez list on zero-day (or earlier).
Beyond that, Sega found it more profitable to stop wasting their time on hardware development, and instead release their software on everyone else's hardware. Why fight Nintendo, Sony and Microsoft when you can instead put games on their hardware and treble your sales overnight?
To answer your question: MONEY. This is the reason why everything happens in this world. Don't for a minute think that any company gives a stuff about you and your desires. It's your wallet they want.
Nope
Piracy didn't kill the DC.
SEGA did with their horrible reputation (Sega CD, 32X, Saturn), and their lack of advertising funds to help correct their reputation.
Yeah, the dreamcast was able to run pirated software quite easily, but ways to obtain such goods back in the life of the system were not very wide spread (there weren't torrents or much of anything like that). The average person was not able to rip their own DC games, so they would have to rely on downloading. Downloading at a time when broadband was in only a very small percentage of homes.
I'd easily bet that the number of people pirating current gen systems is FAR greater than those that pirated the DC in its day, and these consoles are still around, and doing just fine selling software.