Basically, GW can do send out a letter to the site owners saying that if they will sue them if they don't stop breaching copyrite. They can also send the same letter to the server host, as they are potentially liable for the contents on their servers. What this basically means is that the person getting the letter either does what GW wants, or has to spend a ton of money on lawyers to prove that it hasn't breached GW's intellectual property.
For a site owner, they might think the legal principle is worth spending tens of thousands of dollars on. Likely, however, they do not.
For the server host, someone else's legal issue is never worth them spending tens of thousands of dollars on - so they will almost cancel their contract with the site owners if they recieve such a letter.... which kills the site.
Note that in the scenarios above, what's important isn't whether the site has breached GW's IP... but whether GW thinks it has. Thus why we are extra careful not to give GW a reason to think we have.
And yes, this has happened before... sites have gone under due to breaching IP.
Inquisitor Moderatis Ruminahui