It's easy to forget the mass panic around hackers in the 80s and 90s! It wasn't a letter from your ISP telling you to cut that shit out (pirating).

Kevin Mitnick got sentenced to a year in jail accessing an internal network of a company, and transferring the source code of their software. As far as I understand he didn't extort the company, threaten them, or release the files. The hack was in 1979 and he was charged in 1988.

The Free Kevin movement in the late 90s (for his later arrest) really created this environment where people pushing back on how blown out of proportion the criminal charges were helped popularize the idea of white hat hacking. If I recall correctly it started as individuals advertising their services for pen testing, etc, and approaching companies with their discoveries hoping for a pay out. I'm sure the big bounty system was just a more efficient way for companies to get this same service without having to hire someone do the testing. They only pay for results. The benefit to the hacker is there is much less risk of being accused of blackmail or hit with charges for admitting to the hack if they cold-approach a company.