In the article it mentioned "portions" of the internet. So I have to assume every one polled figured it would not be the part of the internet they are on but the part they(the bad guys)are on. If there was such a thing.
Like someone else mentioned. The consequences for such a thing are so much larger than what they are trying to stop.
One thing people should be aware of is that almost no VPS hosting solution is secure.
The worst offender is Parallels/Virtuozzo(which I think godaddy uses).
On the linux side. A root user on the host node can simply run the command
vzctl enter 1111
and enter your vps without a password. To make things even scarier, when an admin enters your container this way. It doesnt leave a bash history file. You have a very small chance of ever knowing they entered the container at all.
Even if they dont want to enter your container. They still have full access to all of your files which are located in in the /vz folder on the host node.
Other vps solutions are slightly more secure. But it seems like %50 of the vps hosting industry is using virttozzo and most of them probably have no issue entering your container with or with out your permission.
It's simply not possible for a virtualised system to be secure from its host. Even if your filesystem is encrypted inside your slice, the kernel which decrypts it is an ordinary process running under their control. It's as well to assume that it can and will leak, and plan accordingly.
It's essentially DRM, except that you would be the media provider and the hosting company is the pirate. For your stuff to function you need to provide the cryptext, the decryption device and the key. So of course they have access.
Like someone else mentioned. The consequences for such a thing are so much larger than what they are trying to stop.