Some hackers are bad, and others good — or not so wicked and outright stupid to do something that would send him straight to jail. Like Paul Graham said in his book, Hackers & Painters,

To add the confusion, the noun “hack” also has two senses. It can be either a compliment or an insult. It’s called a hack when you do something in an ugly way. But when you do something so clever that you somehow beat the system, that’s also called a hack. The word is used more often in the former than the latter sense, probably because ugly solutions are more common than brilliant ones (p. 50).

Apparently, Jon who made youtorrent is a hacker (see Businessweek essay, Meet a pirate’s best friend (sourced from gatorlog)). But, in which sense? It says:

Asked why so many smart techies get into pirated music and movies, he says a lot of people pretend they’re doing it to take on the Hollywood Establishment. But the truth, he says, is that it’s a way to get traffic—and by extension, money. “To be brutally honest, it’s now ruthless on the Internet.”

So, what the heck is he hacking? With the investment of one week’s coding and $20,000 for the domain plus $500 per month for running the site (and probably some more to conceal his identity and legal fee just in case), the system he tries to beat is hardly the bits and bytes of the computer architecture and those niceties. Rather, he’s trying to pry open the barriers of rules, regulations, laws and morality, to hack into the legal, social and economic system of today. With the new phase of the computer development (you may label it “web 2.0” or similarly, although I kind of sense that there should be a better name), hackers these days are not hacking the computer system anymore: It’s boring. They hack the society.

Worst case for him is not a jail cell, but the fat traffic and revenue and (possibly) a settlement with the media and a buyout by traffic-obsessed rich guys. It’s not a “worst case” in a usual sense, because those windfalls will happen anyway. No matter how illegal or outrageous or deeply insulting to our sense of morality a site may be, media people will never pursue and prosecute a guy without a penny. They have the patience to wait until he gets some. And, as he says, it’s brutally ruthless out there.