Wouldn't a similar line of reasoning be "It seems that computers running Microsoft Windows are a hotspot of botnet activity. Year after year, a vast majority of computers used in botnets are running Windows; they are clearly not doing enough to prevent abuse by their users. Lets give control of the Windows code base to Linus"
I think most of the judges would be able to see through it and recognize that running a free DNS service which ignores abuse by botnets and having an OS which can be used to run various programs on, including malware, is a bit different thing. If you could prove Microsoft "clearly not doing enough to prevent abuse", you could probably win a juicy class-action lawsuit, but proving this would be extremely hard.
How would NO-IP detect C&C servers aliased to their subdomains, even if they connected to every single one of their subdomains daily -- they wouldn't know what ports to scan. By my, possibly naive thinking, they'd have to impose denial of service attacks on their own customers, constantly, and they would be easily thwarted by port knocking schemes. Probably their only recourse is to stop offering free service, and instead take payment, or require and verify customer IDs. I'm not sure there's a technical solution. Microsoft seems to be attacking their business model.
If they went through with their intended plan to stop supporting Windows XP, then proving that they were "clearly not doing enough to prevent abouse" would be trivially easy.
How so? Microsoft never promised it would support XP forever. EOLing old versions is a standard and widely accepted industry practice. Just buy (or install for free) a newer operating system. Buying a license to run Windows XP on your computer does not entitle you to unlimited amount of free labor from Microsoft. If you think that makes XP suck, nobody forces you to buy it or keep using it. Are you also expecting Linus to still make patches for Linux kernel 1.0?
