But how can it be plagiarism when I bought the paper (or it was freely available on the web). It's not like I was stealing something! No one was hurt!

Confusion between copyright violation and plagiarism

Plagiarism is NOT normally a copyright violation. Copyright is a property right extended for a certain period of time with legal consequences. Plagiarism is usually a personal issue.

Downloading an MP3 from the web and listening to it is very different from downloading a paper and claiming the whole paper or parts of it as your own. Technically the owner of the paper could sue you for copyright violation if you made money from it.

Shoplifting a Hallmark card and giving it to your girlfriend on Valentine's Day is very different from giving her a poem written by your roommate without telling her it isn't your own. Which is worse? I guess it depends if you are the shopowner or the girlfriend!