"The Court acknowledges that the individual Defendants may never be extradited," the judge noted. "Be that as it may, the present motion is based on the argument that the government could never serve Megaupload. Because the alter ego analysis provides a means by which it may be possible to serve the Corporate defendant, it is appropriate to deny Defendant's motion without prejudice."
To sum up what was said in that paragraph:
Megaupload was arguing a technicality that Megaupload does not possess a US address, and as such cannot be served legal summons. The judge pointed out that this enables criminals to dodge US law by never having addresses here, and that since Dotcom is the face of Megaupload, he might as well be the one served.
Of course, one could argue in response that US law doesn't extend to people in other countries, but this is dodging the issue. The issue at hand is that there aren't many international treaties about how to deal with international crimes on the internet, and what to do with the suspects/where to try them in court. As much as people like bitching about the US/bitching about how the takedown was wrong because piracy ain't wrong (depending on who is complaining) there aren't very good procedures for cases like this other than trying to appeal to the authorities in the countries hosting the suspects... and while that can sometimes result in satisfactory outcomes, other times countries won't be willing to cooperate for whatever reason (they don't view the behavior as a crime, they don't like the country who wants to bring a case, whatever). This encourages countries to act as unilaterally as possible, which results in stupid crap like this happening.
Countries really need to sit down and bang out some treaties regarding how they'll handle internet crime (intellectual property crimes in particular, since those are probably the vast majority of internet crimes).