Even though there is a lot of (social) legal sharing going on between users, the focus is always on illegal sharing. He has a point there, though I think it's a pity.
IMO it's not even that suited to piracy, as the deduplication means that they can find everyone that has a file! Torrents are way better for that.
The principles of dropship could be used for sharing photos, videos, public datasets, git-like source control, or even as building block for wiki-like distributed databases. The possibilities are endless when every file can be called up with just its hash.
If they did how hard would it be to pad media files with some salt to break hashing anyways? Not hard at all...
Also, wouldn't breaking the hash nullify one of the ostensible advantages of this method (the de-dupe of the stored files)? If the goal is solving global file distribution, making each copy of every originally-identical file unique - and therefore requiring n times the storage - isn't a viable solution.
Myself, I really regarded dropship as a nice feature. As Dropbox had implemented the great idea of putting all humanity's data in one big hash-addressable vat, sharing is a logical extension. If you would cache the popular blocks locally (dropbox already does this in a way with LAN P2P), global data distribution would be pretty much a solved problem.
Obviously, this affects legal and illegal files in the same way. It's really a shame that people are still so obsessed with the illegal applications, that they become blinded to how useful this is for legal ones.