you could also use them to program your toaster.
Is it wrong that my first thought was towards talkie toaster there?
Back on topic aside from this recent string of raids most of the time it is usually those who sell copied games as well that get taken down (they are pretty much the low hanging fruit of this sort of thing). The main problem is big companies and the agency that is made to represent them normally can afford a $2m a year lawyer to fight their battles (which I dare say will come in civil rather than criminal court: you normally have to get your own lawyer) whereas you probably will not be able to do this.
The other problem is some of those cases that are fought can end up setting dangerous precedents/rulings which trickle backwards into the more grey areas that you are finding yourself in.
In this case your best route may be to set up something with a base of operations "being" in a different country with less strict laws: antigua just got a nice ruling to this end (although only against US interests it seems) and it has been pirate island for a while before this, Canada has not got that much in the way of copyright nonsense (for now at least), Mexico if are the other side of things is not bad either.
As for modchip installs I would not take it as a complete get around but the consoles I have seen are very often in need of repair or extra fans and other aftermarket devices to run well.