I think their real goal was to destroy MU. If the case happened to go away in the process, that might even be better, since you wouldn't have to worry about pesky precedence being set. If the government can blame the case going away on somebody else, they might be able to duck any civil consequences in the process (IANAL). They may have thought this through very well.

One reason this may be patently false is that I'm sure Hollywood would love to see people put in jail for copyright infringement.

I, on the other hand believe that officials had to have IT specialists to tell them about the cost to keep the storage running.