I am not arguing this point, but Megaupload/RapidShare are known to be primarily used for piracy. That cannot be argued.
So was VCR's. However, the US Courts ruled that since there ARE legitimate uses for VCR's, they cannot be banned because they enable piracy. This was before selling videos became the huge business it is today.
http://en.wikipedia.org/wiki/Sony_Corp._of_America_v._Universal_City_Studios,_Inc.
In addition, the DMCA created safe harbor provisions for hosting companies. Did the copyright holders follow the correct procedure in contesting content distributed there? And did MU follow the law in how it handled that? That will be important to know as well.