You can absolutely take down the offending material; you'll just lose the collateral (you can also transfer the contract to someone else but that will likely no

You can absolutely take down the offending material; you'll just lose the collateral (you can also transfer the contract to someone else but that will likely not be legal in all jurisdictions). However, as the contracts are made between the clients and miners directly, miners can choose to charge anonymous/untrusted clients more to make up for this potential eventuality.