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There's something not quite right about the fact that your firm representing a company selling a product might preclude you from defending and individual against allegations of criminal wrongdoing that could land that individual in jail.

It just seems like these areas shouldn't be mixing quite like they are.

It's called legal ethics, and is a good thing. A law firm is supposed to be a vigorous advocate for its client's interests, and it cannot do that when it has different clients whose interests are substantially at odds.
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I'm not sure if this is a big deal. There is probably a big line of lawyers fighting to be the next to represent MegaUpload. Assuming they have the cash of course.