If you run a service that allows people to upload data, you are hosting pirated content. The DMCA was specifically designed to address this, to create a system whereby those who host data are not on the hook for every violation. The issue is not that you host pirated content but whether you are following all the rules necessary to enjoy safe harbor protection.
If you look into the case, this wasn't a situation in which they accidentally hosted pirated content as a byproduct of hosting legitimate content. There are records of internal communication of the business discussing how to encourage piracy on the platform. This wasn't early Youtube turning a blind eye to piracy with plausible deniability. This was a business consciously and intentionally using piracy as a growth strategy.
Piracy as a growth strategy was very common at the time. Everyone, including Youtube, was just rushing to stay on top long enough to translate piracy into money sufficient to keep the lawyers away a few days longer.
>> Karim left YouTube before Google bought it in 2006. But he kept YouTube e-mail on his personal computer, enabling Viacom to obtain correspondence that Hurley had said he lost, according to court documents. [..] In a July 29, 2005 e-mail, Chen advised Hurley and Karim to "steal it!" in an apparent reference to an unidentified video clip, according to the court documents. After Hurley asked if he wanted to steal movies, Chen replied, "haha ya. Or something."
>> Google had its own copyright reservations about YouTube before it struck a deal. Internal documents obtained by Viacom quote Google executives describing YouTube as "a 'rogue enabler' of content theft" and warning the site "is completely sustained by pirated content."
"Plausible deniability" was the key phrase in my original comment. A one off person abusing the system (before the Google purchase) or Google executives recognizing that "[Youtube] is completely sustained by pirated content." is not the same thing as having corporate policies designed to encourage piracy like Megaupload did.
If you run a service that allows people to upload data, you are hosting pirated content. The DMCA was specifically designed to address this, to create a system whereby those who host data are not on the hook for every violation. The issue is not that you host pirated content but whether you are following all the rules necessary to enjoy safe harbor protection.