In a nutshell, they were sloppy and openly expressed their disregard to copyright holders.
This, however, isn't sound justification for any criminal charges; if they did indeed openly state how they were acting, it would simply prove evidence that they were not acting in good faith, and would lose much of the protection from the "Safe harbor" provisions of the DMCA. This would still not be viable reason to immediately take down the site; as I've seen in the law, this would require that the FBI and Justice Department achieve a ruling in their favor from the courts; this is how civil law works.
In other words, it was the (apparently fabricated) claims of criminal activity (money laundering) that allowed them to get a warrant to attempt to shutter the site themselves; that is how criminal law works. I very much don't like this: given that the Justice Department has effectively no chance of winning the criminal cases, (as I explained in a lengthy section on another article) this poses a huge chance of backfiring, as then the Justice Department is then liable for all the harm brought by the improper actions. This could likely mean that any damages MegaUpload would be liable for through their DMCA violations... Would be made up for by what the Justice Department would owe them.