The problem is that a lot of (new) player still got this clan-pvp-thinking but this is not a H vs X server/community.
As i have read here some are criticising factions without even played them.
I know that a lot of official police/military factions got shared traders or even a trading branch and doing internal trading missions.
And as already mentioned if you fund your pirate char with a smuggler why it is out of your mind that a police/military char get funded by a corporation trader? Beside that the police/military can trade.
Btw: One of my lawful char got a new watch funded recently... :D
A lot of players here got several char in different faction on both 'sides'. So the statement that pirate factions outnumber police/military factions is wrong.
@Jarl: One on my chars bumped into a KSP char yesterday, so they are active.
@Anomander: And how is a pirate gunboat with cap armor funded?
As Zoey already said you should pirate for fun and with decent RP and not to get rich.
A lot of player still don't get this and remain in this 2milordie universe.