Their idea, I think, was that if their site got taken down, they could easily pop back up at another address so long as the big heavy movies were safe and they just needed to make a copy of the HTML site.
So long as the movies were pinned by more than one IPFS server, they would remain available at their IPFS hash, even if one server was subject to a takedown.
The site could then link to the hashes via a public gateway and use an embedded player to play the movies all in simple static html. Very light to copy around.
1. It turns out that the public gateways were not actually willing to handle that amount of traffic for free. Over a few months they got blocked by all the good gateways. They could have set up their own gateway at this point but the following happened so the project died for other reasons.
2. I think the admin was hoping people would pin (seed) the popular files on IPFS and share the server load. This never ended up happening, so in the end there was just one server 'hiding behind' IPFS, burning through bandwidth. It ran out of bandwidth and the (college kid?) trying to run it ran out of money.
3. IPFS isn't designed for anonymity. When they got enough traction, they got a letter and shut down.
This is why ipfs probably isn't the right platform for libgen really.