Yeah, it's a complete crock of shit. To even suggest that somehow ninety percent of the owners have a pirating device is ludicrous. It suggests a nearly 1:1 attach ratio, which would involve selling them by the truckload on websites or in-store availability at all major retailers. There's just no way it could happen.
And it turns out that the report was, basically, entirely horseshit.
It all stems from a report in the British mag, The Sunday Post (No link to article available). They used random quotes off a Singapore website, and attributed them to an ELSPA spokesperson, who not only didn't say these things, but wouldn't be commenting on events outside the UK anyway. ELSPA denies ever saying these things, and Nintendo also stated that the facts are "completely spurious."