Personally, I think it's a great piece of work or "art" much like the Che work done years ago. In fact the Che work took a boring photograph and turned it into an iconic work of art, in fact one of the best and most recognized in the 20th Century.
The Obama work does much the same thing. Only history can say how iconic.
I'm not sure of all the facts of how it was originally used but I think it was as a sort of grassroots political poster plastered everywhere and not an "art piece" for sale. (not sure on that)
If it was a political poster emotionally stating the hope that many felt at the time as the Bush Administration and the Republicans were going down, then it was merely using a news picture that had no real artistic value and would probably never see the light of day again and then "artistically" reborn as an "Che like" symbol of a policital and social movement, then I think it should be fair game.
Additionally if Fairey then took the popularity of the poster and made limited edition prints of it, it could be argued he took political pop art now in the public consciousness, and took it up a notch to sell as an example of popular culture.
While it would be hard to argue that it was not taken from that photograph, it is hard to argue that they are the same picture. Fairey's poster transcends the photograph by such a degree that in my opinion it should stand as it's own creation.
On top of that it was a news photograph, by definition not needing a "release" from the subject and AP and the photographer were making money off it and not sharing with the subject. I think it disengenuios to start crying and wanting compensation for a picture that costs the photographer nothing, when someone takes that picture and transcends it to a new level.
Additionally, the photographer can show no injury in this case, no loss of income, no downside what-so-ever from this work of art being created.
I'm sure many will disagree with me and ask how I'd like my work copied in this manner but transcendental art copied from an original probably needs to be argued on a case by case basis, and this is one for the courts. Forget the slippery slope arguments, just decide each case on the merits.
Michael