It seems that the only way to even put a dent into child pornography is to basically outlaw any kind of network privacy hardware and software. As long as you have privacy you will have this kind of thing. If somebody starts a popular service with (close to) 100% anonymity and 100% data privacy (e.g. server provider doesn't hold encryption keys), they are virtually guaranteed that it will be used for this kind of content. In other words, any truly private service is almost certainly an unwilling accessory to this kind of abuse. Further, users of such services are going to be stigmatized for sharing a service with kiddie porn consumers/producers. That is very unfortunate.
Also, since apparently this kind of content is easily available, we are all one click away from becoming criminals. Imagine somebody posted a link to some kiddie porn on news.yc with a title like "Apple Announces iPhone 4G" on some non-alarming domain. Anybody that clicks the link to get their daily Apple rumor will instantly become a criminal.
Eventually, nearly all of us will probably have some kind of incident like this. And, as companies and governments start recording and analyzing everything we do online, this means that we will all eventually get caught. At any time, any of us could be instantly arrested and (nearly) instantly convicted. This is just like how cops claim that if they follow somebody long enough, eventually they will break a traffic law because it is nearly impossible to follow the laws.
Somebody that can solve these problems would be doing society a lot of good. I wonder if they could make any money in the process.