> Megaupload never complied with DMCA requests
Based on not only the experience of others, but the claims of the DoJ itself, this is clearly false.
> The site charged for access to, and provided advertising around, pirated content.
This is true in the same way YouTube provides advertising around, and your friendly local ISP provides access to, pirated content.
> The site paid people (users/staff - it's a fine line) to provide popular content.
So does YouTube. So do various other business models.
> It went to extraordinary lengths to hide the identity of its operators.
How many legitimate business don't have their owners wrapped in layers of corporations strewn around the globe? Nothing particularly unique or illegal here.
> Now if people believe that anyone should be allowed to set up a site, fill it with full length DVD rips...
It's an outright lie to claim that they themselves filled it with said rips. The users did. Just like many other sites, usenet servers etcetera.
> Kim Schmitz has made a lot of money
Yeah, that's a crime...
You've already corrected one claim, that Megaupload wasn't used for legitimate purposes.
Full disclosure: personally, I believe copyright in it's current form should die. Partly because of exactly this: it makes virtually impossible to provide any service around something that is way more important than the profits of the entertainment industry: the freedom of people to share information.
I also highly doubt this would actually be much of a problem if there was any economic impulse for the entertainment industry to provide a decent alternative.
In the current context, with a ridiculous artificially created scarcity, how the hell is anybody supposed to run a site like Megaupload and not have it full of "illegal" DVD-rips and shit, whether they like it or not?
The DOJ might have evidence that this was deliberate, but all the rest of us have is propaganda and deeply biased speculation.