What's the advantage of that compared to using a bare IP? You still need a server to host your illicit content, so you're still exposed that way. Also, DMCA requests are sent to service providers, not to whoever owns the domain. The whole arrangement is probably worse than a bare IP because your site can be "taken down" by someone else with no warning.

Which is what happened here but not before a few hundred thousand files were copied.

The whole point is that these domain/IP combinations are forgotten which means it could take a long time before the issue is discovered.

At a school I use to attend, their firewall filtered "inappropriate" content (which is a fun story on it's own...). Was a poor system, and in theory, would have a loophole around it...