Sell Illegal Templates In CD And Hostgator Will Host It Legally

Last week my brother puchased a CD which promised contains thousands of unique templates through [url]

He sell it locally for Indonesia market and leave no contact info.

He showed me and I'm surprised that what did guy did is copied from all sources included templatesmonster.com majority which is available alot of through the net (example: [url]burn it into CD and sell it illegaly.

I reported the site to hostgator.com and got the followin reply:
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Hello,

Since there are no templates on the site, you will need to provide evidence of this some how.

Regards,
Richard F.
Network Security Administrator
ISP Blacklist Administrator/Level 3 Systems Administrator
PGP Key: [url]
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I'm not trying to bash HG, but I need your opinion: is the HG respond is already correct?

So learn from the same thing, if I set a website sell cracked properties and only delivery the product through CD or email (not downloadble one) I can host it with HG as long as no offensive files in their server? Or in this case HG just ignore it because could not understand Indonesia languange?