I don't know anything about Swedish law so I can't comment, if the backlash is because it didn't follow or adhere to Swedish law then okay, but I have a strong feeling when it infringes on other national entities (such as American publishers and developers or those from other countries) it impacts more than Sweden. I'm not a legal expert however.
Regardless, there is decency and then there is immorality and again anyway you spin it, even if something is 'legal' in a municipality does NOT inherently mean it is the right or correct thing, it just means it's legal there.
Using the above logic, all it would take is for any country to pass a law that says 'digital thievery of foreign assets is legal'. Then suddenly the Pirate Bay can rip off foreign country assets and it would be ok. I still don't think it makes it right.
The Pirate Bay was aiding and abetting thievery right? And in general most people agree thievery is morally wrong (I think, or thought, sadly this may not be so true?), so, regardless of Sewdish law or any other law, it's wrong, right? Not to the criminals I guess, one way or another, they feel entitled to what others create, which is an awful shame.
There are many laws that are not decent or moral, or that when applied tend to lead to indecent or immoral outcomes, either because they were made that way or because they failed to adjust to a new world and a new reality. Nevertheless, those laws must be respected untill decent and moral laws are written to replace them.
I'm also not an expert, and i don't know much about Swedish Law, and that's why i said that 'it feels like' and not that what indeed happened.
Just like you, i also wondered if the fact that they didn't limit the acess to their site to Swedish residents makes any difference in any of this.
But using your municiplality example, i can agree that such a law would be immoral, but the only moral way to do anyhting about it, would be to have it replaced with a better law, and not use power, money, and politics to 'bypass' that law in order to reach a favorable/wanted outcome in trial, because that's opening the door to do the same, even when the law in question is moral and decent.
And remember that those 'criminals' that 'feel entitled to what others create', are the people who actually download the content. Our friends, family members, co-workers, clients, etc, millions of people all around the world. Do they all deserve to go to jail or have their lives burdened with heavy fines that in many cases they'll never be able to afford ?
The TPB is/was just making things easyer for all those people, but in the end, from a practical point of view alone, they're not really all that relevant. People will adjust and keep on doing it just the same. In fact, lots of people share files every day without ever using a .torrent file, so for them, TPB was never a factor.
And even if the spirit of copyright law was to protect the content creators rights, and to allow them to benefit from their creations, it's not being used for that purpose in most cases today. Today copyright is protecting mainly the interests of the big corporations that hold those IP's, big corporations that managed to 'grab' those rights from the actual creators. And more often than not, for 'peanuts', because those corporations are the ones who have the infrastucture in place to produce, market and distribute that content, infrastructure that the content creators don't have acees to, unless they 'give up' or 'sell' their rights the IP, partially or completely.
So, instead of going on a crusade to put million of people in jail (many of them very nice people even if they do download a movie or a game or whatever), why not addmit that the law needs to change and work towards that end ?