Whenever I read things like this I always think of the book "1984", by George Orwell.
It's stupid and silly, this man is as much responsible for people pirating using his proxy server as a cafe owner is responsible for getting people drunk. It's possible to abuse the service provided, but the users should be wise enough not to. Might aswell go and arrest the owner of every DIY, computer, ... store if you follow this logic. -.-