Thanks, Katie, for elaborating. It's a very good question. To take it to extremes, Amazon could be an "illegal site" under some definitions seeing as they occasionally get copyright infringing ebooks uploaded by people for sale. I guess one criteria to use therefore may be, as you say, on the open willingness and desire of the host to police/take down the infringing material?
I'm thinking on it....also, I'm about to walk my dog's so I'm being a bit disingenuous in saying I'm thinking on it.

But I will, and we'll both also hopefully see what others have to say. It may be that the answer ends up being one of those "grey" ones, hey?
Cheers,
Marc