In terms of liberty, one crime doesn't excuse another, especially when they're not directly related. If I manufacture cigarettes and someone dies of lung cancer, I could be ethically liable but my liberty to make cigarettes shouldn't be impacted. If someone uses YouTube to upload copyrighted things, should YouTube have its domain stolen and its users unable to use the site any more?
I don't think cigarettes are the best example because there is no use for them that doesn't potentially invoke the harmful effects for every single user. YouTube, ISPs, and dynamic domain providers have valid, widespread, legitimate, harmless uses, so YouTube is a better analogy IMO.
If one accepts the idea that courts should be seizing entire swaths of domains just to fight malware, it's still absolutely bizarre that Microsoft themselves should be given control of them, rather than an independent policing body. If there are to be Internet police, they should be independent of any one corporation, industry group, or government.
>>> In terms of liberty, one crime doesn't excuse another,
Except it is not a crime if it's done under lawful authority (by definition) or in self-defense. Otherwise you'd argue imprisoning a murderer or using force to defend your life is a crime, because outside of these circumstances limiting one's freedom of movement or using force on somebody is a crime.
>>> If someone uses YouTube to upload copyrighted things, should YouTube have its domain stolen and its users unable to use the site any more?
If that's the only thing his domain is used for, it very well may happen, and similar things already happened. Seizures of domains used for illegal activities are commonplace.
