Rapidshare died because the market moved on. "File hosting services" like rapidshare have been replaced by cutthroat "cyberlockers" like Keep2share and rapidgator.
The most successful cyberlockers do what Rapidshare decided not to: pay uploaders, even those who share illegally. And also pay linking sites through referral schemes far more resilient legally. They aren't trying to appease anyone not either a customer or a very active uploader. Working with copyright owners beyond base legal requirements (DMCA et al) isn't the business plan anymore. Getting into bed with copyright owners was megaupload's and rapidshare's first mistake. The new plan is to make as much money is possible then abandon the ship the moment the MPAA looks their way.
Filesharers are ok with this. They purchase monthly subscriptions in full knowledge that the service might disappear any day. They aren't looking for a long term relationship anymore. The blind panic resulting from the megaupload raid ended that expectation.
I partly disagree with this. It's true that there is a crowd of uploaders who do it for profit, but Putlocker/Firedrive discontinued their affiliate system in 2012 and continued to be one of the most popular file hosts (yes, they closed down now but that's because they operated in the uk and had issues). Zippyshare also remains very popular when it doesn't pay uploaders either. Vkontakte is another popular file sharing site in addition to 4shared (but 4shared recently started being very strict to copyrighted files).
Argubly one could argue that megaupload was mainly used by non-profit uploaders. It gained popularity with affiliates but afterwards the average person and non-profit uploaders used the website to upload files more than the affiliate users. I believe you had to become a premium member to actually gain access to the rewards feature.
Rapidshare died because not only did they combat copyrighted files, they also blocked the ability to share legit files. As pointed out in the comments elsewhere in this thread, they tried to out-Dropbox Dropbox.
edit: also, Mediafire before they went all-cloud had no affiliate system and is very popular. And look at Mega.co.nz, a very popular website which is used for movies etc.
A hosting service pretends to be a dropbox-style service for backing up and sharing important files. A cyberlocker abandons the pretense, all but calling for people to share files they don't own in exchange for money.
For me, the line is when you start paying website that host links to files on your service (referrals) or when you reward known pirates even after, literally, hundreds of valid takedown notices against their files.
The most successful cyberlockers do what Rapidshare decided not to: pay uploaders, even those who share illegally. And also pay linking sites through referral schemes far more resilient legally. They aren't trying to appease anyone not either a customer or a very active uploader. Working with copyright owners beyond base legal requirements (DMCA et al) isn't the business plan anymore. Getting into bed with copyright owners was megaupload's and rapidshare's first mistake. The new plan is to make as much money is possible then abandon the ship the moment the MPAA looks their way.
Filesharers are ok with this. They purchase monthly subscriptions in full knowledge that the service might disappear any day. They aren't looking for a long term relationship anymore. The blind panic resulting from the megaupload raid ended that expectation.