You want to explicitly read from STDIN, not the magical ARGV, which only reads from STDIN if no argument are given (or to be precise, if @ARGV is empty). Replace your <>
And as a general advice: avoid write tools that ask the user questions: arguments are more flexible, as it makes piping and scripting easier. Imagine that each time you would run perl from the command line, it starts with:
Do you want to enable warnings? [y/N] n
Do you want to loop over the input? [y/N] y
You want to loop over the input. Print $_ each time? [y/N]
... 40 questions later ...
Please type your one-liner, ending with a newline