I'm not sure I follow - how are they legally being willfully blind? They can't offer private encrypted hosting AND know what they're hosting at the same time. Those two things are mutually exclusive.
We're talking about blindness of the search engines. Arguably they know the search engines exist and thus have some kind of duty to notice the rampant copyright infringement taking place and stop it.
>Arguably they know the search engines exist and thus have some kind of duty to notice the rampant copyright infringement taking place and stop it.
Are you serious? You expect them to scour the internet for third party websites and then scrape them for links? How are they even supposed to know whether a particular instance is infringing or licensed? What happens when the third party site prohibits scraping?
It isn't their job to be the copyright police. You cannot fix the problem of copyright enforcement being too expensive by foisting the cost onto a third party -- that doesn't fix that it's too expensive, it's just a textbook case of copyright owners engaging in the economic pollution known as externalizing costs.