But then the copyright holder would have to proove that this thing named "Lady Gaga - all albums" is actually infringing material and not a bunch of, say, zipped lolcats. So they'd have to check it and file a complaint on per-file basis, at which point Mega just deletes that file. Isn't it just like YouTube, but without the ability to run copyrighted-material-detection algorithms on data?
BTW. in Poland there's a well-known sharing service that operates this way; promptly deleting infringing content, while everybody knows that the files will reappear shortly somewhere else, and it's all Google-indexed (I don't think that it's by coincidence), so with simple "site:" query you can even skip the paid search feature.
If your access to files consists of a public index (or something like a torrent tracker), they can just crawl the index, fetch all the keys, fetch all the files and check them. It would be a bandwidth hog compared to running recognition patterns on localhost, but it's not hard.
And more to the point, they could put the onus on Mega to go do that. It would be easy to argue in court "if we can find the key, so can they, if we can check the file, so can they" and cast their actions as wilful negligence.
It's not so much whack-a-mole, as "keep it quiet", then. Mega pretty much has to kill what they can find the keys to, but if you keep the key a secret and share it sparingly, that is no longer possible.
BTW. in Poland there's a well-known sharing service that operates this way; promptly deleting infringing content, while everybody knows that the files will reappear shortly somewhere else, and it's all Google-indexed (I don't think that it's by coincidence), so with simple "site:" query you can even skip the paid search feature.