If they blocked files by hash, users would simply upload slightly corrupt duplicates, and the situation would quickly get out of hand. Megaupload's business mo

If they blocked files by hash, users would simply upload slightly corrupt duplicates, and the situation would quickly get out of hand. Megaupload's business model was to promote data consolidation (more downloads of the same file) and to provide good data retention (don't delete users' data). Now they are seen as evil for favoring that model instead of favoring heavy-handed DMCA takedowns.