It's not clear who determines what "sufficient steps" would be, however. That could range from 'No-IP did nothing at all' to 'they tried and we weren't impressed'. The MS claim that "free dynamic dns is frequently exploited by cybercriminals" seems like hand-waving, to me. It's also used legitimately by millions of people who have home routers which came with support for No-IP baked into firmware...
Well, no, it isn't perfectly clear from the article - are the courts in a position to independently evaluate No-IP's efforts, or did they trust Microsoft's legal team regarding their insufficiency?