Do you think there's any other way to run the site, at least in 2011?
There's no other reasonable way they could make enough money to cover the expenses. The audience for these sites is, by design, children/teens with no access to money and adults who are there explicitly to avoid spending money. By the nature of the content they host, they're not going to get any first tier advertisers, so they have to make up for it in volume.
Yes, it's designed to host illegal pirated content. I know there are plenty of legitimate uses for it, but it doesn't change that it's still a shitty site.
I'm not saying that nothing should be done about this Universal thing. I actually enjoy seeing the music industry taken down a few pegs.
There's no other reasonable way they could make enough money to cover the expenses. The audience for these sites is, by design, children/teens with no access to money and adults who are there explicitly to avoid spending money. By the nature of the content they host, they're not going to get any first tier advertisers, so they have to make up for it in volume.