Good decision: Not to let government directly force ISPs or sites to monitor.. Government intervention always lead to constantly increasing intervention and tracking abuse. Politicians are the last people that should be in control.
Separately, I think that in the end it will both be necessary and prudent for ISPs and sites to implement a level of their own monitoring to be able to show legal "due diligence" in preventing their systems from being abused for obvious illegal purposes.
Otherwise they will in the end spend their time and money in court responding to complaints from content owners. Both on requests to shutdown illegal content, and in some cases even suits for aiding-and-abetting content/media abusers, when it turns out that they obviously knew what was uploaded to their systems and/or systems being used for. As any professional site owner would know by instinct and by a simple look at the content.
Turning a blind eye merely because it creates content and discussion on their site will catch up to them and make them a take-down target.
By US DMCA law an ISP/site is not immediately liable for bad user uploaded content, provided that they respond immediately when notified of stolen content. But if they do not act appropriately, let it continue, or it turns out they knew before hand, they can be criminally charged for aiding-and-abetting, and stuck with a felony.