The reaction, of course, shows how disgustingly superior (to logic and reason, really) the industry perceives itself - basically everything that an artist creates and is related to the profit of the music industry must fit into a narrow idea of control. When they produce music that sells, the industry wants control. When it's only an appearance that could funnel traffic to something they can sell, they will allow it, because they know they will have control down the line. But if it is something like the Megaupload case - having the artists create something that does neither, but also seemingly "strengthen the enemy", they are caught outside of their logic.
Now, anybody who isn't with their back to the wall would work with such a situation creatively. But with the media industry, we have a curious case of not needing to get defensive (after all, they still turn record profits), but having bought into the idea that that is the attitude they have to display in order to survive.
It would be interesting to hear precisely how much standing they have on this, really. I wouldn't be surprised if some of the artists that appeared in that clip do have contracts that say - whatever you do, we own, if we don't like it, we will fight it. After all - the industry isn't stupid and they certainly have the access to the best legal defenses you can get these days.
The good thing about this hack by Megaupload is that it's a loose-loose for the industry and while they have no shortage of material in that area (it seems like we hear a horribly backwards story like this every month), that steady drip really may end up give us some progressive approaches.