Why does megaupload have to comply with the DMCA; they're a Hong Kong company. The US simply has no jurisdiction over what they do.
IF a service provider receives a notice of infringement AND promptly disables access to the content, THEN the service provider is granted immunity from liability for that infringement.
If you ignore the notice then this provision simply doesn't apply. You haven't "violated the DMCA" or anything like that, you simply don't gain the benefits offered by meeting the conditions of that section of the law.
Why would an entity outside of the US choose to comply with those notices? Because they may be sued in a US court, and when in a US court, the judge is going to apply US law -- including the protections of the safe harbor provision.
Why would an entity outside the US care about the result of a trial in US court? First, because international treaties mean they may be extradited to the US for violating these particular laws, and second, because the officers of the company may wish to be able to travel to the US -- at which point a sentence against them could be carried out.
This is garbage and I can't believe any court in the world would uphold this extradition. I'm appalled that they even got a US court to issue a warrant for such obviously-trumped-up charges. This is truly unprecedented.
The internet changes the landscape drastically.... and using current laws to deal with real issues involving it is often dificult to useless. That doesnt mean we shold justify things that are wrong, nor should we make bad law.
ignoring the international issues.... just because a site could be used for copyright infringement is noreason tomtake it down. but lets be realistic, there a many sites out there where the owners knew damn well that their primary customer base were copyright infringers, and they catered to it fairly directly. sure some people used it for other things..... but if the primary revenue stream hosting and serving unlicensed work and you darn well know it.... you are asking for trouble.
That doesn't seem to be the case anymore.
The government's ability to preform an action does not legitimize that action.