This whole thing is just a huge dog & pony show by Hollywood and the FBI. Its the exact same tactics they use when they catch someone downloading illegal content.
Early on, they made a huge "example" out of the first offenders. Huge fines, drag them into court, media everywhere, blah blah blah. Now, the majority of the cases settle for a few thousand bucks and everyone moves on.
Well, this is their first hosting provider that they (HollywoodFBI) have gone after, and they want to put on a big show so that everyone else knows they mean business. They'll bring in helicopters & troops & go after your kids and pregnant wife if you don't play by their rules.