My first thought is to wonder why someone would want to be in a space where an arms race against people devoted to child porn was both necessary and constant. Particularly when that space wasn't providing capital sufficient to retain a lawyer.
My gut tells me that as a matter of will, it's going to be hard to keep this class of activity from reoccurring regardless of how this incident works out and that scaling the service will scale the headaches of monitoring and policing user behavior along with it. Personally, I'd rather deal with users I liked. YMMV.
As to it being an arms race, I'm not sure the techniques to filter content are really competing against anything. Sure, it seems like there will always be more sites to ban, but its not like adblocking, where the tricks are getting more sophisticated over time.
Also, I like (most of) my users! We've had some spam issues in the past where users created minor headaches, but this was a first.