So I upload a DJ mix and it gets rejected because of "Copyright blah blah". Then I fill out the form and tell them "Guys, it's a DJ mix, not the song you claim it to be". I never received a response. So I guess SoundCloud is no longer for me.
In the UK, where Soundcloud is based, it's very similar, except the equivalent of "fair use" is called "fair dealing" and it's much more restrictive in scope.
My point is that the laws don't stop the people doing the "infringing". We don't care. Its the businesses that could profit from the human need for creativity that are hurt by the absurd situation.