no. nothing illegal about providing peer to peer sharing.
You can use it in a complete legal and safe sense as a means to exchange pictures, data, files, or music from artists that want to get their name out and/or music that the individual themselves have been working on.
NS wouldn't have to take all the bandwidth and server load on themselves. NS could simply provide a gateway that connected both members user address/ip address with each other and give a direct connection between the 2 for file sharing. Could even implement some other network's apps that would handle the load.
Although a system like that would have it's vulnerabilities. Still a thought, and it is a pretty good one.