I don't think the laws are so harsh. It seems like YouTube caved in to the music industry interests so that popular artists continue to premiere their videos on YouTube.
Go dig up a copy of the indictment. It includes a bunch of internal emails from Dotcom and other running his site where they talk about all this stuff. It was basically a site whose intent and business model was hosting pirated movies. That you could also use it to host your own photos or whatever was there to try to provide cover.