I live in a third world country where copyright laws aren't really enforced and I see web developers on my workplace going to popular template sale sites and simply stealing all the markup code off of the demo templates along with the js/css/image files and simply tweaking or replacing watermarked photos if there are any. I mean really, is there a way to protect template demos besides using an image for the demo. This reason I never got into designing as deep as I am into programming is because you gotta be really creative and artistically inclined to succeed in that area. Your work can be too easily stolen or copied as a designer. What can template creators do to protect there work. P.S. As a kid I've been guilty of this also.
Unfortunately any encryption on HTML/CSS/Javascript codes has negative effects.Slowing down rendering, Nonstandard codes and many bad results. There are many Javascript Obfucators that you can use, but for HTML/CSS i can't tell anything due to problems... the best thing you can do is deleting white-spaces and comments.
It's pretty simple to steal any template online. Sometimes I wonder how much more money those template creators lose out on than they actually make. My co-workers in the design department basically go on template sale sites and just copy a template and tweak it to fit their needs, send it over to me for programming and a site a created in a day and can range from $1000 US and more, cause they steal some really beautiful designs.