Most of those file sharing platforms get a lot of business from copyright infringers. Keeping files password-protected allows the platform to respond to takedow

Most of those file sharing platforms get a lot of business from copyright infringers. Keeping files password-protected allows the platform to respond to takedown requests but deal with a minimal number of takedowns. The platform doesn't need to tell its users to do things that way; it's just a natural outcome of incentives. Uploaders don't want their uploads removed. I remember downloading encrypted .rar files to get expensive textbooks even back in the early days of RapidShare. The sites are by their nature pretty sketchy but usually for less heinous reasons than those under discussion here.