well, here are my two cents...
While I don't have a problem personally with software that uses activation (even though I do take some offense at the general suspicion toward the user as opposed to the general trust without it), I know quite a few people who wouldn't touch a program just because it needs to be activated (and honestly I don't know wheather I would've ever bought it knowing this, even though - as I said - I don't have a problem with it now). So how sure are you that it will create more paying users (or at least keep the unpaying from using it). Not to forget: someone who didn't buy it is far from likely to buy it if he is stopped from using it by technical means.
Then there are the technical questions. Will the binary file be in effect a license file? will it be machine independant? If not that's a real problem and/or pain in the ass
I.E.: Can I obtain one and use it on another machine? This also sounds like you plan to have the code needed to create it in the application, which means hackers can just use it to create their own license files...
You could use public/private key cryptography, have the server send the license file signed with a private key of yours, then how would the app validate it? Obviously against the corresponding public key, but how will it get it? If it's part of the application it can just be exchanged to allow fake signatures, if it's taken from the server that connection can be faked (simply redirected via host-file to localhost for example might do) to do the same.
Also don't forget they can just patch the .exe
And it becomes your responsibility to make it possible for them to use the program, meaning: supply proxy support or some alternative way to activated it for an employee of a company who don't allow programs like this at all - or return the money...
My point is this: It's
incredibly hard to do this properly and in an unbreakeable way, are you sure it's worth the effort?
I still think it might repell potential new users and is unlikely to gain you even just close to the same amout of people from the group that currently uses it cracked (who are probably more likely angry you took away their nice program).
Whatever you do: make sure you don't inconvenience either long-time customers, new ones or both too much or it'll backfire horribly!