I eagerly await all the Sharia law trials of anyone who's posted a bit.ly link to a pornographic picture, then.

And they're not being tried in those courts. Their domain has simply been seized because that's easier than winning in court.

Actually...

If you are in one country, and are clearly and unambiguously doing business with someone in another country -- with written agreements, money/goods/etc. transferring -- then it's simply not a new idea that you may end up subject in some way to the laws of that other country. It also isn't a particularly scary idea.

The idea that "on the internet" is some sort of magical extra-jurisdictional space is the new and scary idea.

You are missing the point. Libya can totally trail someone for hosting any porn site under Sharia law. It is completely irrelevant what the TLD is or were the servers are hosted. The only thing that is important is that it is accessible from within Libya. If you want to protect yourself from this you need to block out all Libyan IPs. At least this is the case for many laws in many jurisdictions, I obviously don't know anything the Libyan one. However, if the site is hosted under a Libyan TLD this gives them additional power to block the site. This is a very unfortunate situation for website owners around the world, but this is the way it is.

Don't know why everyone downvoted. I'm only stating the legal reality, not making a comment on whether that's "moral" or "right".

It doesn't say anywhere they had business transactions in the jurisdiction. Thats the entire point.

Non-US site, non-US registrar, non-US accounts/transactions.

Still seized by DHS. Because it's illegal in the US. That means you can be put on trial in any country in the world if you break any laws, anywhere. That's what the article is getting at.