The charges are baseless? They were paying people who uploaded large amounts of materials, including copyrighted movies, music, and software. Megaupload was preserving these files, even when they were reported.
Those are not baseless charges. Megaupload was directly contributing to copyright infringement.
Edit: And let's be honest here: How many of you have used Megaupload or any other similar storage site for storing/sharing non-copyrighted material (basically, non-movie, music, game)? The only things I've ever used them for are sending music to my friends and downloading porn. In fact, I cannot remember ever seeing someone using those sites legitimately.