Photobucket and Flickr and all the other photo sites are basically hiding behind the DMCA (Digital Millenium Copyright Act) that grants a service provider to host any content unless the owner of the content sends in a DMCA notice demanding removal of the infringing content.

I'd say that the DMCA is pretty much broken, because the amount of infringing content has exploded and typically can not be controlled by the rights holders any longer.

Take Flickr, for example. I found a number of images shot by a colleague and stolen and uploaded to Flickr by some moron. I wanted to notify Flickr directly, but they do have just the "review this photo" button (without any way to indicate WHY I would like FLickr to review the photo in question). OK, so I selected "[X] This is a photo" (very silly) and then hit the "send" button.

Today I received a canned message saying basically: Flickr adheres to the DMCA law and will remove any infringing content if the OWNER actually notifies them.

And here is my question - is the DMCA still valid if the service operator gets notified by a third party that infringing content is hosted on the service?