The problem here was that this really hit very legal gray error. What they were doing wasn't techinally wrong but you couldn't say it was well...right.
To give you a general idea here is some words from Wikipedia:
The indictment
[1][67] alleged that Megaupload differed from other online file storage businesses.
Media reports covering the case highlighted a number of points from the indictment used to support claims of illegal activity. The indictment provided a number of instances alleged to show criminal behaviour, as well as indicating design points of Megaupload's operating model as being evidence of criminal intent:
[1]SourceBasically, what they are saying is this: The difference between Megaupload and other sites is that they not only knew of illegal activity that goes on their site but they supported it which in the eyes of the US is teetering on the edge of illegal which is why he was arrested.
Just a note: I'm not saying what the US did was wither right or wrong, I just want to make sure we understand what exactly went down. (Hopefully I haven't stirred the pot too much)
