>>4
They complied with all obvious regulations that most other public file hosters complied with and what they did was legal.
The obvious reason they were taken down was because some powerful industry people have managed to harass law enforcement officials enough and have them find all the tiny irregularities they could find in the way megaupload ran their business or how some of their employees behaved, so they could nail them on all those small things and try to make a big thing out of it and destroy their business. Truly dirty tactics. This is literally similar dirtyness to busting Al Capone for tax evasion or others for money laundering because they couldn't catch them doing any of the bigger crimes. What's worse is that as a result of this arrest, it has sent many companies in the same business running afraid and closing shop, however some of the bigger giants remained.
The result of this is that some less distributed data will be lost, but I highly doubt that the data that those that caused this thing to go down will actually be gone - anything popular is mirrored all over the Internet, far beyond anyone's ability to take all of the copies down. The only one who will suffer here will be the Average Joe who actually used their service for legit backup purposes, which is a shame.
The long-term consequences of this will be that many will be afraid to run the type of service megaupload used to run while still maintaining some connection to the US (many such services started blocking .us users), but this will have zero effect on stopping what they wanted to stop - if people want to use the internet to communicate some data, they will use it, regardless what other people might want, maybe not with the service they shut down, but with countless other services and protocols available and newly appearing. The major global effect is that there's just a change in the rate of usage of various services and protocols when some service or protocol becomes unavailable or unreliable. The personal effect is that they've potentially ruined the lifes and businesses of a few people, instead of actually spending their time on something more productive and beneficial to humanity.