A friend of mine by the name of Scott once had a job performing archaeological survey and recording sites in the portion of the Sierra Nevadas in eastern Fresno county. He told me of coming across a rather large site, covered in bedrock mortars and a containing a large midden, and finding a man already there, apparently waiting for them. The man confronted Scott's team, and informed them that the site on which they were standing was his site, and that the survey team could go find their own.
The man, of course, was a looter, someone who illegally goes to archaeological sites and destroys them looking for collectible or sellable artifacts.
The site was located on public lands administered by the Forest Service, so his claim that he owned the site was laughable at best. Nonetheless, this sort of mentality is not uncommon. Many looters feel that they have staked a claim to a site and that anyone else digging into or even recording the site, even people authorized by the agency that manages the land, is a violation of some sort of code of honor - this despite the fact the looters are doing something that is clearly illegal and therefore in violation of whatever code actually does govern resources on public lands.
Scott, being new to field archaeology, didn't know what to do. He tried to explain that the crew was there on the Forest Service's business and that they were simply doing their job. The looter was having none of it - as far as he was concerned, this was his site and nobody else was touching it. As I recall, Scott and company left the site and came back later, when the looter was gone, to record it. They also reported the looter to the Forest Ranger.
I find myself thinking about Scott's experience now because I am reviewing site records and reports for the region in which he had been working at the time. Looting is much more common in these sites than in any other area that I have worked. Several of the reports discuss attempts to stop looting, and they run the gamut from capping the site with gravel (relatively effective, but expensive) to occasional monitoring by archaeologists and Forest Rangers (not quite as expensive, but extremely ineffective) to posting signs telling people not to loot (cheap, but about as effective as you'd think it is).
Looters occupy this weird place in the archaeology world. They are universally reviled by archaeologists, Native Americans, and most Forest Service personnel, but within their own ranks there is considerable variability. Some see themselves as archaeologists, not comprehending that they are employing unnecessarily destructive methods and that their lack of methodology and publication both ensures that data will be destroyed and that data which does survive will never be passed on. Others see themselves as a sort of frontiersman, making a living off the land by selling that which comes out of it. Others are essentially hobbyists, treating potsherds and arrowheads like other collectors treat baseball cards and comic books. I have met looters who feel that, as the land is public land, they have a right as members of the public to take from it whatever the please...and I have met even more who give this as a rationalization, but then become upset when someone else is looting "their" site. And some see looting as a way of "sticking it to the man", although they tend to be vague about the identity of the man to whom they are sticking it, which I guess goes to show that for some people it is best to rebel even if you haven't a clue as to against who or what you are rebelling.
So, really, the approaches to preventing looting will be more or less effective depending on who it is that is doing the looting. Simply putting up signs saying telling people not to loot, or listing the potential legal penalties for looting, may stop the hobbyists, while that may encourage the self-styled "bad boy" looters. Capping a site with gravel will stop many looters, but those who are making a living off of it may simply increase their activities to make sure that they get enough from their activities to justify the effort.
But the role of looters is a bit more complex still. Often, they don't know that their activities are illegal, and many of them don't understand that there is a difference between looting and controlled archaeological excavation. I have met a number of professional archaeologists who once were looters, but who came over to the "light side" when they became more curious and decided to learn about the sites that they had been digging up. When I work with these people, their attitude towards looters is somewhat schizophrenic - they tend to become upset over the damage done by looting, but they can identify with the looters and that either tempers their anger or stokes it, depending on the individual.
Ultimately, the problem with looters from the perspective of an archaeologist and a member of the public is that they are essentially stealing from public lands and doing it in a way that destroys the cultural resources on those lands. Even if the individual artifacts that they take weren't at issue, the fact that they destroy sites to get them would still be a problem.