Therefore it is key that the legitimate vs questionable content ratio is not getting too much out of balance.
I am sure it helped a lot for Megaupload's public perception that regular people actually used the service for sending files and were screaming about the government stealing their holiday videos. The narrative of the Torrentfreak story is awesome as it humanizes the subject and creates sympathy for the cause.
In an ideal case an approach would fill a minor existing need in a way that is impossible to separate from "other" content. I was trying to do this in the comment above by suggesting some form of torrent driven YouTube alternative (i.e. video embedding witin a browser), but contravert's encryption idea could really make this even more awesome.
Its a clever hack though. Because you can always argue, that File you downloaded has meaningless contents and that some algorithm at your end is re arranging it as a meaningful form.
But the copyright enforcers can always argue this is a clever way of stealing something. More like smuggling a big thing by dividing into pieces and transporting them in surrogate objects.