IPs and CCs are dime a dozen... so if you block one, they'll just get a fresh one... then there is a minor detail that a lot of content gets downloaded and then shared using hacked users/passes... then there is a detail that many sites use cdn to host their content, which likely wouldn't be compatible with on-the-fly watermarking setup you have in mind... etc
so what you proposed sounds good in theory, but in practice there are a lot of problems with it...
