Yeah, that's sort of what I thought. This "On the flip side, Kim Dotcom will lose the ability to use the data to defend himself after pleading not guilty to piracy," seems very strange to me. Obviously, if the data were to be deleted, it would be because the FBI stopped Megaupload from paying for those data-center services. Thus, we would get a situation where the feds are at least indirectly responsible for destroying evidence, and then argue "well, prove that the data which has just been conveniently destroyed wasn't pirated!" That makes no sense at all, only makes for a stronger defense, so I don't think that's what they're going to try (which is why they had better preserve the damn data).

Perhaps even more importantly, if this data gets destroyed and they can't find further evidence to use against the Megaupload bosses, this would mean a federal bureau effectively destroyed a company without having any evidence of them having committed a crime. That would be a very bad thing, and would set a very, very bad precedent.

It's happened many times before. Anderson Consulting (http://en.wikipedia.org/wiki/Arthur_Andersen), then one of the "Big 5" accounting companies, suffered a "sentence first, verdict afterwords" execution when they were prosecuted for their putative crimes in the Enron debacle.

The reversal by the Supreme Court a few years later was cold comfort to the shell of the company that was left, the 85,000 people it once employed, the partners who lost the value of their holdings in the company, etc.

(And this hysteria lead to Sar-Box, which just happened to be the final nail in the coffin of the traditional IPO startup exit except for a very few massive successes.)

I stand corrected. Unfortunately, this makes it only sadder.