Those of us working defense at large organizations have known for a while that No-IP domains are wretched hives of scum and villainy. Any company with a threat model that includes at least one of a diverse set of characters ranging from malware authors to organized crime to nation state teams should be logging all DNS requests and treating any request to a No-IP domain as an indicator of compromise.
Microsoft has a successful history of disrupting botnet C&C and distribution channels via domain seizures, which is why this request probably sailed through Federal Court. The only difference in this situation is that there are innocent bystanders affected, which generally doesn't happen since the other domains they have seized have been 100% used for fraud.
I feel bad for those folks and the people at No-IP who maybe meant well, but the truth is that the fight to keep normal people safe is bigger than just technological, and needs to include civil legal actions like this.