God, this is as bad as reading Slashdot.
Start by reading this post
and the linked discussion at webhostingtalk. Here are a few pieces of factual information to consider before this gets blown further out of proportion:
1) It wasn't Wordpress; it was one guy with a single leased server (and no backups). He offered free blog hosting and supposedly had 73,000 customers. His hosting service (BurstNet) was approached by Federal authorities and told to take the server offline. They did so. Whether Burst was presented with a court order or a Patriot Act request or something else is not known. What Burst did say was that some of the hosted materials violated the terms-of-service agreement which the blog hoster agreed to when leasing the server.
2) No one outside Burst and the authorities involved know what the server is alleged to contain, but this case looks nothing at all like mere copyright infringement. More likely the machine contained child pornography or perhaps even state secrets.
3) What probably happened was that the FBI confiscated the server for further forensic review. In cases like this, Burst is forbidden from informing the lessor why the server was taken offline to avoid impeding further investigation. I suspect the PATRIOT act was invoked, but others in the web hosting business said that child pornography would have resulted in the same type of gag order being imposed.
4) The 73,000 bloggers essentially represent "collateral damage" here. In a posting I made on Slashdot, I likened the situation to a magazine with lots of individual contributors. If one of the contributors posted child pornography in his or her article, you can be sure the magazine would be impounded regardless of whether the other articles were totally legitimate.
5) The guy running this service seems like a whiny nutcase. It apparently never crossed his mind that giving away free blogs to all comers might encourage someone to store illegal materials on the server he was renting. He figured he could sit at home and watch his AdSense revenues come rolling in without having to pay attention to what was actually on the machine. Yes, with 73K accounts that would be a difficult thing to do, but no one said running a blogging host was going to be easy. Whether the hoster has some type of editorial responsibility is an important policy issue that, as far as I know, has not been extensively considered or litigated (outside of the take-down provisions of the DMCA that govern potential copyright infringement).
There are lots of complicated issues here, but imagining that the stormtroopers have arrived and are trampling on free speech and small animals is an over-exaggeration. If you want to have a serious discussion about how blogging should be treated in terms of free-speech issues, let's have that discussion. There are already four pages over at Slashdot on how the US is now like China and how fascism is on the rise in America. Let's not replicate that conversation here.