I think it's a little more to it than that - it's not just that they made money of piracy, but also the publicity and prestige around the case. I'd liken it to what happened with Kevin Mitnick - when he eluded the FBI for so long - and the surrounding pressure to increase sentencing around unauthorized access to computer systems. The lobby powers are a bit different this time around, with copyright being the main issue - but "damages" are just as, if not way more, overblown IMNHO.
Piss off large conglomerates, and they'll in turn get the government to throw the book at you, even if they have to write a new book to get it done...
From what I recall, MegaUpload was accused of not only providing incentives for uploading files, but also ignoring the fact that some files were very obviously pirate content.
I'm not sure they are, they're just not nearly as public. Kim Dotcom is / was notoriously boastful about his actions, and all the money he made off those actions. I've never heard similar things about the founders of any other file hosting service founder/owner that is well known for piracy. Makes him an incredibly appealing target I think.
Same as PirateBay, which made its name when they publicly replied to copyright enforcement letters with insults. Refusing to be humbled by established authorities is the real crime, because it corrodes their legitimacy and hence their whole existence.
It's a bit like being homosexual in countries with harsh state-religions but tolerant attitudes: keep it quiet and nobody will bother you, but if you flaunt it then the law will crack down on you, because you're attacking the basis of the whole legal edifice.
Piss off large conglomerates, and they'll in turn get the government to throw the book at you, even if they have to write a new book to get it done...