That is an excellent question, yes. I presume the way Usenet servers handled the alt.binaries.* groups was a combination of delete messages and Section 230 legal protection for ISPs, but deleted messages aren't reliable and Section 230 didn't exist until 1996, so I presume that wasn't really a solved problem.

I would say there's a fair bit of value in the way the rest of Usenet addressed this, which was to not carry anything other than plaintext content, which at least limits the scope of illegal material although it doesn't eliminate it. Even if a distributed system supports images/video/etc., it would probably help substantially to only replicate the image content across servers, and have clients load the images directly from the server they were posted to.