Possession of images on your PC is enough...even if they were downloaded by a third party...which could happen to you or me if somebody hacked one of our PCs and used it as a slave to store the images.
Yes, the very current example you gave, is so current Tricky from Massive Attack got done for it a decade ago.
The self-appointed ruler (also known as "The Pirate Queen") isn't much of a villain but she is far from being any kind of hero (at least in this story). The antagonist wants to kill her as she's a thorn in his side. Yes, the paedophile character is expendable. A lot of my characters are. Gregory's mental health problems are brought on due to a traumatic event. During a seventy-year trip, there was an error in his cryo-pod rendering him concious for a portion of the trip with nothing but an AI for company (that did it's best to preserve his sanity). Locked in a tight, dark and claustrophobic pod, unable to move with a computerized and emotionless voice talking to you for ten years. Well, that would drive anyone mad. No, people hate gays because it goes against their religious or cultural beliefs. People hate paedophiles because of the harm they pose to children and what various paedophiles have done in the past.
Well, the main crime antagonist in my and T.Trian's ms is a pedo, and we try to write her as believably as we can, so I don't think you'd be stooping too low either. They do exist.
How do people know he's a paedophile, though? And surely to blackmail him there must have been some actual rape of underage children going on or something. I understand that there could be a lot of prejudice and dislike for their leader or whatever being a paedophile, but it could go the other way if they either are about as sick as he is or that they respect him more because he's managed to keep his "primal urges" to have sex with children in check which would show on some level that he likes power and money more than abusing others for his own personal pleasure or at least that he's socially intelligent enough not to sexually abuse people on the street. Just my two cents.
I actually have to say, some of the elements between your story and what @T.Trian and I are writing are eerily alike! I think we three might just have some kind of brainwave overlap, so, like, if you ever have it published, we'll have to buy it 'cause we'll probably end up liking it. Anyway, you have to decide if the members of the gang can stomach pedophilia. It's ok in surprisingly "respectable" circles, which is totally scary. Just look up child porn and pedo rings in e.g. Belgium. Human traffickers traffic kids just as they traffic adults, so you've got UN soldiers bragging about fucking pre-teens. So your pirate gang can go either way, depending on their values, really. In prison child molesters get beat up and killed, so pedos aren't in huge favor among crooks either. You can have your protag use his deviant desires against him, and if the gang is low on resources, your hero may be able to control them (or the leader) this way. Another option is your hero thinks he can, but when he tries to use it against the leader, he's like "whatever, everyone knows anyway. Why do you think we're into human trafficking in the first place? Have you any idea how high the demand is for preteen hookers in our crummy town?" I wouldn't worry about making a character thoroughly unlikable. I doubt there's anything you can do anymore that'd be so terrible no one would read your story. What I pay attention to is when something is lurid and when it's realistic. It's been a challenge in my and T's ms too 'cause at some point, despite writing what we know does happen out there, crammed it in too much, and then it becomes boring, and the last thing I want is to desensitize people to violence, abuse, etc. And people who don't like reading about uncomfortable things, won't read it. We look for different things in books, some just want to be entertained, some do it to escape reality, and some want it to be as real as it gets for whatever reasons.
