Why does this site allow people to download psp iso so openly and managed to stay online for so long.It's even a clickbank merchant and many people have profited about this.. http://www.pspblender.com/
It is indeed illegal, however it depends on how it works. From what I can tell it don't use a HTTP server they own, to me it sounds like a p2p thing.
these types of sites typically dont have HTTP servers for the files as Cardiff says and so are very difficult to close down as whilst you remove the front end the back end remains and a new front end easily and quickly created. Second issue is find them, there are millions of sites that operate these type of activities and it isnt a simple job to get them perminantly removed. At some point a business decision needs to be made over the cost of solicitors making the legal arguements etc and the amount of revenue they are costing the business. For large sites like the former Napster or the now closed down AllofMP3 it was clearly economical to pursue them but a small (in visitor numbers) back water site almost certainly isnt - of cause that doesnt mean that they wont and so owners of such sites shouldnt consider themselves immune. The other consideration is people making complaints to the likes of their webhosts or payment gateways.... joe public is highly unlikely to do so unlike if the material on the site was pornographic/ violent/ racists etc