If you gave up because of the cost, your reason is different from the blog. Or I did not understand the post.
About copyright, why not make it difficult to find protected music? If people share their own content, the name of this file will not be named as a Justin Bieber song. It will be your own name. I believe most sites want to share protected music and then try to negotiate their use.
Eventually, people may try to game the system, but the site may have an automatic way to freeze the song after receiving a complaint and check if it is a copyright infringement. And this file can be used to feed the system, so it can avoid futures complaints.
Well, perhaps I should clarify that I gave up because my assessment of the costs paralleled the research and numbers in the blog post. No way could I run this as a 'side project' on beer money, because if the site became even remotely popular, the escalating costs of the hosting, CDN, encoding etc. would have just slammed me quickly, and I didn't have any monetisation strategy in place.
I basically wanted to build what SoundCloud was in its early days, before they lost touch with their user base.
The other main point about the copyright infringement in the article wasn't on my radar at all, because I wanted my site to be for music creators to share ideas and collaborate, rather than post commercial music on - but thinking back, THAT could have become a huge problem too, if, as you have suggested, nefarious people had simply used my platform to share non public domain music.
About copyright, why not make it difficult to find protected music? If people share their own content, the name of this file will not be named as a Justin Bieber song. It will be your own name. I believe most sites want to share protected music and then try to negotiate their use.
Eventually, people may try to game the system, but the site may have an automatic way to freeze the song after receiving a complaint and check if it is a copyright infringement. And this file can be used to feed the system, so it can avoid futures complaints.