Piracy isn't necessarily a problem: websites can be password-protected, and magazines downloaded from illegal torrent sites isn't much more of a problem with online magazines as it is with paper copies (i.e. paper copies can be scanned and uploaded to torrents: a bit more work but still simple to do).
I think the problem with online publications is that it's much harder to draw the reader in and keep them there. Web-surfers have notoriously short attention spans, and if they come across a boring bit, they're likely to go to another website rather than flick over a couple of paper pages to something more interesting.
This means that online readers will be more transient and less loyal to the publication. It's harder to win new readership than keep existing readership, but when existing readers are not loyal then the publishers have their work cut out to keep it going.