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I think in this case, at least based on the bits and pieces I am hearing out of the inditement, the US gov't at least has a pretty good case that they fully knew of at least some of the infringing content and did nothing about it.
Also they were "throttling" how many take down notices they'd "serve" in a day. Initially at 2,500 in one case and then later upped it to 5,000 after the company founder decided that they were driving enough traffic that they could afford to "lose" more infringing material by doing more take downs in a day. Something to that effect.
Based on loser case law this time and on the DMCA, you have a resonable amount of time to respond to a DMCA take down notice. The question is, what is resonable...and I think in this case it is a little bit of "I know it when I see it". If you have an automated tool that can serve a take down with no input from your end (which Megaupload had), then an unlimited number of take downs can be serviced as soon as the system can actually process it through.
The limits were not imposed for system capacity reasons, but for driving foot traffic reasons (if they allowed too much copyright infringing material to be brought down faster than new stuff could be uploaded/re-linked then they would lose foot traffic).
It is not like they had a system capacity issue about the rapidity of take downs and it wasn't like they had to manually do them, they had 3 guys doing take downs and all those 3 humans could realistically do in a day were 2,500 take downs and they couldn't resonably afford to hire more employees simply to deal with take down notices.
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