The simple fact is, without mainstream content, Grooveshark would be a joke. Putting in a requirement - Do not play songs with the word Primus in the metadata - would probably "accidentally" keep out some cover bands' songs that are legally uploaded, but it would do a very good job of keeping out most Primus music. Even if that music showed up, but without the metadata, nobody would be finding it in searches, which also helps eliminate the use of that illegal content. What you do, frankly, is close to the legal minimum because the business wouldn't exist if you did a better job at it.

Within 5 minutes I can go find music on Grooveshark that is there illegally. It ought to be pretty easy for you to do the same queries and prevent that from happening. Would you prevent legal music? Yes. What is more important - that some cover band be allowed to post their music, or that Primus be allowed to retain their rights? Particularly when you consider that nobody is coming to Grooveshark to hear covers of Primus.

I'm not saying that operating legally in the music industry is easy - far from it. But on the spectrum of trying to, unprofitable Pandora is on one side, and Grooveshark is waving hello in the far distance.