Crown lawyer John Pike said the disclosure ordered by the District Court was of a magnitude not found in similar cases. He said the current order captured 22 million emails and hundreds of thousands of documents.
He said extradition should be limited to the "record of case" - the document produced at the extradition hearing which had an assurance from the prosecuting state it was "a proper and tryable case".
The international agreement to assist the US meant New Zealand could be assured its system would allow the accused a fair trial, he said. Mr Pike said judges in extradition cases should shy away from rulings on conflicting evidence.
However, Mr Davison said the US had chosen to come to New Zealand to seek extradition and in doing so accepted the laws here would apply. He said those accused of a crime had a basic right to test the evidence against them. The extradition process was "not to be treated or acted upon as if it is a rubber stamp", he said.
Mr Davison said the District Court had ruled for the discovery of evidence which directly supported the allegations against the accused. He said the evidence should be simple to produce and included the FBI's own information. It included "covert operations" by FBI agents pretending to be Megaupload customers, he said. There was also the belief it would include surveillance operations which could have captured conferences carried out across the online Skype video service.
He said Dotcom also wanted evidence from the company's records showing how copyright holders, including Hollywood studios and record companies, were given access to Megaupload's computers to delete infringing material. The evidence would show there was no "wilfulness" to break the law.
Mr Davison said the entire FBI case was "ill-founded" and built on selective evidence.
Guyon Foley, who represented Dotcom's business partners, said the accused had suffered an "intrusive series of actions", including arrest, jail for a period, the seizure of assets and the prospect of being sent to a foreign country to stand trial.
He said the language in the extradition law bluntly aligned the process with the committal process used in preliminary stages of New Zealand criminal trials. It meant the law specifically allowed for evidence to be called which challenged the case, he said.
The US "record of case" was "hypothesis" and "conjecture" which did not offer supporting evidence. He said the strength of the US case for extradition was important - and disclosure would show it was "worthless".
Correction
A report about the Dotcom case on Tuesday said that Crown Law had handed over the Dotcom litigation to senior counsel Christine Gordon of Meredith Connell. This is incorrect. In February Crown Law instructed Ms Gordon to represent the US on the extradition matter. Crown Law continues to manage both the mutual assistance and extradition litigation and there has been no change. The Herald apologises for the error.
