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Hey Matt, nice trick of saying "I agree with you 100%" and then promptly not agreeing at all. You're also not listening. Sometimes people who hotlink your content are kind of doing you a favor, and if you have everything watermarked it might be to your benefit. But that's the content provider's decision.
Whether he got ancillary benefit, or some money for advertising to MySpace users, that's totally his right.
Matt's right about one thing, MOST, MOST hosts would have buckled. I had it happen to me. Big host. The second a big corporation sends them a letter, trust me, a lawyer's written it and it probably has 'copyright infringement' or 'cease and desist' your host is going to shut it down. It's not fair, but it's true.
The fact it's porn and it wasn't really making you any money means that suing MySpace for trying to frustrate your business probably won't amount to much, but if you do, you're certainly in the right.
Do your best to fuck up the hosting company though :D
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