My argument was that if an account is repeatedly uploading files that are flagged as infringing, then it becomes hard to argue that the ongoing infringement is not apparent to the service provider. So it's not a direct requirement to close accounts, but an effect of the law nonetheless:

> Under the knowledge standard, a service provider is eligible for the limitation on liability only if it does not have actual knowledge of the infringement, is not aware of facts or circumstances from which infringing activity is apparent, or upon gaining such knowledge or awareness, responds expeditiously to take the material down or block access to it.

http://www.copyright.gov/legislation/dmca.pdf

And as the Megaupload indictment showed, these sites are not taking efforts to stay unaware of what their users are doing -- they're looking into their accounts, seeing that the top shared files are DVD rips and commercial software, then rewarding these users instead of removing the content. That's illegal.