I'm sure the deal isn't everlasting... The content producers are the ones with leverage here, not the people who deliver the content (cable, satellite, etc)

Whoever has the cash has the power. Why would the content producers want to miss out on a major source of their revenue so that Justin.tv can stream their stuff for free? The advertisers and end users don't care, but everyone else in the chain has a monetary incentive to shut down illegal streams like JTV.

Why does anyone care where you view the advertisements? The point is that they are being viewed at all. The service providers (Cable, Satellite) have the weakest hand in this chain.