A few years ago bandwidth and storage was much more expensive than it is today.

Rapidshare was a service that had to swiftly and reluctantly change their business model. They were operating out of large offices with over 60 employees and due to the change they saw a sudden drstic drop in revenue.

Rapidshare's financial information isn't public since it's a private company, but one could argue whether they were actually losing money or not making the profits that they expected at the time of the shutdown.