Censorship of the top-content list is actually a valid point against them. It means Megaupload had some system to identify infringing files, but rather than flagging them for investigation or deletion, they simply removed them from the public list.
I disagree. Distributing copyrighted material to unauthorized parties is an issue. Storing it doesn't seem like an issue to me. 100% of cloud storage companies are grossly violating all sorts of copyrights if this is the case. Storing it but removing the ability for the internet at large to leech it seems legit to me. If someone distributes the private URL to such files, I think that counts as them distributing it, not megaupload.
This is a slippery slope - when can you actually "identify an infringing file?" Can I identify an infringing file because I match the filename against the names of popular movies? Probably not. Can my startup recognize infringing files because it calculates the checksum of each block of each file for use in deduplication? Sort of, with a lot of technical build-out, and never with any certainty...
If I see "OMG WAREZ.rar" in a news feed on my homepage, should I remove the file itself, all access to the file, or just the link to the file? What if I have a strict do-not-delete policy for user data? What if I have a strict do-not-download policy for user data (even public user data), to prevent me from accidentally possessing child porn on my work PC? Do I just make an arbitrary and capricious blacklist of file names?
It's absolutely not a valid point against them - their system for "identifying infringing files" was more like a system for "identifying bad-looking file names," which is tangentially related at best.
