Your argument, Alan, lowers a personal work of art to the level of a mere mechanical commodity. Of course, that does seem to be the mentality of a lot of art dealers, even some artists. It might or might not be illegal theft, but just because 70 years or so have past, that doesn't morally justify the misappropriation someone else's work. Nothing was improved in this case, rather it was warped. And we're not talking about movies here. AA isn't alive to give permission to do so, but at least his heirs are. Common decency would have sought their consent first. Where I came from, someone doesn't climb over a barbed wire fence and going fishing in their bass pond without permission.
Art students for centuries have gone to museums and made copies of famous works as part of their training. That is all winked at provided that it's all up front, and they don't try to sell as those in fashion of forgeries. At least some work goes into it. But now someone could just walk up and take a digital shot and reissue the image after a bit of PS futzing. The quality would never match the original, and for that reason, nobody gives a damn how many
thousands of cell phone shots have been taken of the Mona Lisa. But if they started asking 10K apiece for them,
and claimed those restored to sight the actual person in DaVinci's presence when he painted her, that would no doubt raise a lot of eyebrows (plus contemptuous laughs).
AA did give permission for select students to work with some of his original negs, under certain supervised auspices. But in this case, they took an actual print of his and scanned it, then reworked (colorized) that. That's a gray zone (pardon me, if that sounds like a pun). This isn't about using negatives under express permission and controlled circumstances as a learning tool. Seemingly nobody was asked up front except his lawyers, implying he already knew he was doing something controversial. That's just Noi Yoik Joik rude behavior as far as I'm concerned. And if shaming turns out to be the only tool we've got to stop that, it will probably work if enough voices are involved.
You ask, Where will it end, Alan, if restriction are in place? Well, if there are no restrictions, someone could make a very high quality scan of a Moonrise print and reissue millions of them if they wanted to, in direct competition with his Trust.