There's probably a multitude of reasons why that is -- the app is $7 with no trial version, it's not a super-popular app quite yet (so one pirated copy on a popular message board is probably traveling farther than the copies coming off of the official App Store), and there are probably at least a few other factors in the mix that we don't know yet. Still, 95% is obviously pretty darn high for a platform that's supposed to only deliver software through Apple's official store.
Now, fortunately Fishlabs doesn't sound litigious -- they're not pulling the old "piracy = lost sales" fallacy that many companies in this situation would do. They are lowering the price on the app -- they expected it to be worth more, but apparently their consumer base seems to disagree. They tell Mobile Entertainment that they'd entertain the idea of providing content only through Apple's in-app purchasing service (presumably, that would prevent piracy by locking down the extra content), but they also say that's a gamble they've tried and missed on other platforms before.
Of course, it'll take more than one post on one message board to make hay out of the problem of app piracy -- it definitely happens, but on the other hand, there certainly are apps selling well, and there are also apps not selling well that don't have this level of piracy going on. Apple already has lots of authentication and validation processes in place, but if app piracy is this big a problem for everyone, they may need to look at more.