The article discusses this as a problem, but as far as Microsoft is concerned, it's everything as it should be. Customers aren't pissed enough to leave because they still see value in the service they're paying for and the ads are pretty unobtrusive. Until end-users or publishers get annoyed enough at the status quo to make a significant enough dent in their profits, Microsoft is not going to care. As it stands, we'll pretty much have to wait for one of the big name publishers to get annoyed enough that their games aren't getting the exposure they want, because the current minority voice of end-users annoyed at ads just isn't loud enough, and I don't think it ever will be. Publishers and their triple-A titles on the other hand have a ton of sway.
Of course, it will be interesting to see if the increasing dependence on Microsoft continues. If so, it might get to the point where the publishers don't have much sway as far as negotiations are concerned. Given that the gaming industry (excepting a few smart companies and indie devs) are basically abandoning the PC market in favor of locked-in console gamers, we're near the point where the console manufacturers and their signing keys are going to be the barrier between publishers and their continued success (or eventual failure).
What if the site name was different, say, "scumbagcopyrightinfringingwebsites.net", from someone who works in the movie industry and wants to generate a public list of sites of copyright infringers for his employer to take down (unlikely, I know, but an example nonetheless)? The intent is wildly different, but the end is the same--someone could use it to find streams or what have you of shows they want to watch or songs they want to listen to.
What if the site just blindly compiles video results from the Google Custom Search API allowing people unfamiliar with Google hacks to find TV shows? Different intent, but no attempt to limit those who obviously intend to use it for copyright infringement. Should a site like this have to take into consideration the copyright holders?
I imagine that, just following random links on the internet from nearly any given site, I could eventually get to the site I mentioned above. How many links is enough degrees of separation? Surely if liability is introduced simply by linking to a website, you are liable for anything sites you link to also link to. I wonder how many government sites link to Google as their site search provider? Google can get you anywhere, so surely the government would in those cases be liable for linking to Google which links to torrent sites. And that's why this idea is completely absurd.
And how the hell is what this kid did worthy of extradition, or even a felony in the US? Our copyright policy is so ridiculous.
In my opinion, the only time a school should have the ability to initiate disciplinary action for an act committed off school premises should be after trial and conviction of a crime. Free speech protections often don't apply in schools (don't get me started on that), but a school has absolutely no right to restrict a student's speech off school grounds, and this would be aptly enforced by requiring disciplinary sanctions for off ground behavior be the result of a conviction in a court of law. This school would get laughed at if they even mentioned prosecution of this student for this behavior to a DA, so there's no reason they should be allowed to do this.