I've had a number of PRO cases, and I've never had one of their claims progress to the point where lawyers are involved without the PRO having developed pretty solid proof of the infringement that they are prepared to present in Court. As to the idea posed above about a PRO monitoring a venue and then only charging for the particular songs in their catalog that were infringed, that's exactly what they do. Unfortunately, the law provides statutory damages for intentional infringement (read my post above about the award of $10,000 per infringement) as a way to discourage people from ripping off artists. So the PRO only has to go after the infringement of a few songs to make the suit very worthwhile. Also keep in mind that the money collected by the PROs (including settlements, and statutory damages) from the infringement of their catalogs of music goes back to the artists.
As to the comment about whether people actually come to the venue because CDs are being played over the PA, I can tell you that the way the Courts decide these cases, they generally find that the music is in fact the reason that people show up. There are caselaw decisions that say the music is used to create "atmosphere" to attract customers from which the owner derives a profit. It would be terribly unfair to allow people to profit from the use of the music without paying the artists whose brains and sweat created it.
Finally, as to the cost associated with a small venue, it's absurd to think that the PROs are in the business of harassing small businesses to get them to stop using music. To the contrary, the PROs and the artists they represent WANT the venues to use the music, because that's how the PROs and the artists get paid. They don't set fees that are ridiculous or that are going to discourage licensees from signing up. They do, however, put some teeth into their enforcement when the venue refuses to buy a license, takes an in-your-face attitude, and basically steals the music. It is not beyond the PRO to prosecute the theft (that's what it is - stealing) by a particular venue to set an example for other venues and to send a message about how you had better buy a license of stop using the music. On the other hand, we have settled cases in which the venue eventually sees the light and agrees to buy a license. They pay a little more to resolve the case, as a slap on the hand for being naughty and to discourage them from doing it again, but the PRO generally doesn't want them to go out of business. They want the venue to sign up and add to the flow of income for the artists, which is in everyone's best interests.
Of course - there is still the alternative. You can always stop using the music. You can create atmosphere in other ways. I also play at a local coffee house that has a rule that performers can ONLY use their original compositions. They don't cater to the crowd who wants to hear covers, and they don't care, and they don't pay a PRO, and they don't get bothered because the PROs know its not their intention to be using anything from the catalog.