I think illegal is a strong word, none of those sites are trying to sell copyrighted material all they are trying to do is provide a service for the end user and if anything provide free promotion for the movies / tv shows / music artists they provide artwork for.
Certainly with fanart.tv (as the admin / developer of fanart.tv, that's the only site I can really talk about) if you exclude posters and wallpapers (which were only added by popular demand) the other artwork types by and large take a lot of work to create and would only be done by dedicated fans.
Kodi currently hits our API about 50million times a month
I can't tell from the description but the app isn't necessarily even getting the images itself if it's just pulling the images as stored by Kodi (formerly XBMC), and Kodi gets its images from user submitted collections such as https://fanart.tv https://www.themoviedb.org/ or http://thetvdb.com/ which are all operating under a presumption of fair use as their entire purpose for being is to provide fans with the best possible media experience.
In addition fanart.tv gets incorrectly filed "Notice of DMCA removal from Google Search" notices every few days, every single one of which claims the url that has been indicated is hosting the "movie", which is abssolutely not the case, it's clearly an automated system that I have to spend hours every month sending counter claims for.
You might want to look into ovh, they have recently expanded to cover the USA and Canada, my site http://fanart.tv gets nowhere near the bandwidth techdirt does probably (about 10,000 visitors a day to the site) but the API (which just returns JSON or XML) gets between 1.3 - 2 million hits a day (it's used by a lot of mediacentres like XBMC) and our costs are currently just £1530 a year (it's easier for me to pay for a year in advance), that's for 2 servers both with a dedicated 100mbit connection (so no bandwidth limitations except what the pipe can physically do), so a few servers like http://www.ovh.co.uk/dedicated_servers/eg_64g.xml would probably work really well for techdirt and be a lot cheaper.
I was watching the end of the hearing, and the guy at the end said that noone had disagreed that piracy is causing job losses and costing billions of dollars, so if its incontravertable then something needs to be done, whether the bill has unintended consequences or not, something has to be done...
When you only invite people to speak who don't have that view point, it's not really that surprising that none of them disagreed, maybe if they had invited some people who had a differing view point things might have been different (the lady from google only really addressed things that affect google)