SCOTUS & MU
The "'perfect world' nonsense" is your idea that the world revolves around the fact that YOU uploaded some garbage to Megaupload.
And you haven't really replied to any of the points in Steve Knox's post other than call it "'perfect world' nonsense".
As for the US Supreme Court saying that "VCR's were NOT to be banned if they had 'significant non-infringing uses" you have clearly misunderstood it: it does NOT mean "some uses, or possible uses which do not require infringement". A more exact - although still inexact - meaning would be "many of its uses do not necessarily require infringement". It does not mean "someone somewhere is using it for non-infringing uses". And it *certainly* does not mean "YOU are using it to store versions of something you're writing".
To put this another way, your files do not shield Megaupload.
And here is what the Supreme Court said in "MGM Studios, Inc. v. Grokster, Ltd." when they vacated a lower court ruling that found in favor of Grokster: "the rule on inducement of infringement as developed in the early cases is no different today. Advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe, and a showing that infringement was encouraged overcomes the law's reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use…" (That from Wikipedia's articles, see http://en.wikipedia.org/wiki/MGM_Studios,_Inc._v._Grokster,_Ltd. and http://en.wikipedia.org/wiki/Sony_Corp._v._Universal_City_Studios)
So the fact that Megaupload might have non-infringing uses does not shield them from liability for infringing uses.
And even then, it does not appear to me at least that either of these two Supreme Court decisions offer any defense to Megaupload: they have offer payments to users who upload frequently-downloaded files, knew as shown by their emails that they knew that their servers were being used for infringement and profited from it, and refused to remove infringing files.
By the way, should your files on Megaupload also shield them from charges of money-laundering?
"As for your side note, quite a straw man. The only reason the MU version might be the only copy is because 'you deleted the original'? So, hard drive failure, computer stolen, fire/flood/unexpected corporate-driven police-raid, what about in THOSE circumstances?"
Now THIS would be a good example of a straw-man argument! What would make you think that Megaupload servers are immune to these same problems? So you have not defeated Steve Knox's original point, which, if I may paraphrase, is that anyone keeping their only copies of important files on Megaupload, or anywhere else, with no copies anywhere else, is an "idiot".