The problem is that it is hard (impossible) to tell from within an iOS app if it has been purchased legitimately. If you want to give users the convenience to buy the app for $.99 and then start playing, then I don't think you have a chance to add any meaningful validation. I wonder how it would've worked with subscription IAPs. I would guess that they are a big psychological problem to potential legit players. This would have been a great chance to find out.
In my experience, piracy on iOS varies a lot with the region, too. The majority of my analytics come from China with only one(!) copy ever being sold there.
I have seen a lot of small shops in Thailand that feature iMac's with iTunes accounts that are loaded with apps. People go there, pick out the apps they want, leave their phone there for an hour or so and then pick it up again for a very low fee.
I'm not sure if all of those phones are jailbroken, or if they just use a single iTunes account to synchronise with hundreds of phones.
I believe the restriction is that each iTunes account can be synced to 10 devices, and each device can sync with 5 iTunes accounts. So it's very likely that those shops are jailbreaking the phones and installing pirated apps.
In my experience, piracy on iOS varies a lot with the region, too. The majority of my analytics come from China with only one(!) copy ever being sold there.