How are his products illegal? It's not like Skydrive and Google Drive are devoid of pirated content. Also Megaupload was a very valuable service back in the day when there wasn't many upload providers around..
Megaupload was selling access to content, not ability to store data. The users who downloaded data were the ones that had to pay. Only way this type of service is profitable is when it has "stuff" that is wanted by masses of people. And since Megaupload didn't produce/resell anything, illegal content is the only other option.
Also, during the time megauplaod existed, there always were upload providers. Megaupload came quite late into the game.
Of course.... but who pays (and for what, exactly) is somewhat immaterial. You're able to post public links to files and get (effectively) unlimited downloads via Dropbox too. It was a counter-example to your Google.com/yourdesiredfile
Who pays (and why) is hardly immaterial when it has a defining effect on how the site is actually used. There's a good reason as to why Google and Dropbox can easily claim legitimacy while Mega has to struggle.