That is incorrect. Without the DMCA, the company running a site is liable for everything on the site if it does any moderation at all, and they wouldn't just be ordered to remove content, the financial penalties would be massive. Yes, the DMCA is deeply flawed, but it was passed to solve real problems.
Even with the DMCA in practice the safe harbor provisions have proven ineffective and sites in practice are still liable for content, see YouTube v Viacom. The main benefit for DMCA is for the ISPs, mainly.
In practice DMCA simply made it easier to take down supposed infringers of copyright violations and spread the popularity of drm. In theory, yes it’s good, and it probably made companies like YouTube and Facebook more comfortable with user content. The other benefit is that because you can accept DMCA requests and assume they are correct as long as you respond promptly your liability should be limited
In any case you’re probably right but haven’t heard of any high profile lawsuits prior to DMCA regarding internet content so it’s hard to really say.
What the law says though is that DMCA criminalizing circumventing drm and other access control and related technologies, services or tools.
