The file-sharing site in question is Megaupload. It created a snappy promotional video for its site featuring will.i.am, Kayne West, Kim Kardashian, Serena Williams, and Snoop Dogg. Macy Gray sang the original score along with a half dozen other artists. The music created for the add was original and kinda great. And it worked. The ad went viral.
Then the story gets weird. Universal Music Group (UMG) contacted YouTube with a takedown notice. At first, most assumed UMG was claiming that the work infringed on a UMG copywrite. And down came the song.
Thing was, UMG doesn't have a copyright to any of the material. And still doesn’t. Megaupload created the song and the video. The artists stood by the file-sharing. Megaupload contacted UMG and got nowhere. So instead, they talked to their lawyers and that's how a file-sharing site ended up suing a major record label.
Your letter could be read to suggest that UMG's rights to use the YouTube "Content Management System" with respect to certain user-posted videos are limited to instances in which UMG asserts a claim that a user-posted video contains material that infringes a UMG copyright. As you know, UMG's rights in this regard are not limited to copyright infringement, as set forth more completely in the March 31, 2009 Video License Agreement for UGC Video Service Providers, including without limitation Paragraphs 1(b) and 1(g) thereof.
In the meantime the Megaupload video is back up on Youtube and you can check it out here: