Mostly, it just means that people will go out and download the pirated copy off the internet. Smooth move.
If I want to buy your book, and you don't want to sell me your book, that's fine -- I'll buy someone else's book. I've chewed through about 40 novels on my Kindle already, but its not like I'm in imminent danger of running out if I can't buy yours. (The only people I see this working out for are "event" book such as, e.g., the Harry Potters of the world.)
Also, people will often do translations of popular books (c.f Harry Potter) before the publisher gets around to it.