The simple fact is, they should know what content they have licenses for, and what content they don't. Maintaining a list of the top 1,000,000 bands in the world and not letting anybody upload tracks with metadata that included those bands and song names in it would not be that difficult. The data is there, because otherwise users could not search for those band names and find what they're looking for.
Simply put, if Grooveshark did everything they could to fight copyrighted material being added to their site, they wouldn't have a business. Maybe now that they have some licenses and an audience they could survive, but they would have never gotten to where they were without significant illegal content being uploaded and accessed by their users.