I'm not so sure it's that cut and dry.
The laws being what they are, what one side or the other wants has no meaning. Mod sites have to deal with these things from the legal perspective.
I realize that it may not be the wisest cours of action on my part, but being the nitpicker that I am, I'll point out that the legality of it has no bearing on this issue.
As Oblivion legally belongs to Bethesda Softworks, it is their final legal say of what goes and what not.
And arguably let us not forget that there are Open Source projects and software on the market, GNU, GPL, commercial GPL etc.
Some of the modders here do use such third party software, alghoritms and research papers in their modding.
I agree with Psymon that it is more of an ethics problem and a group reaction and shun policy.
Afterall nobody interdicts anyone to upload on dshare, megaupload and such.
So we have 3 separate issues here:
1. Legality. That is a non-issue as it is not covered by any law other than the copyrhight and intellectual property laws, and than it will more likely be decided in favor of Bethesda as ultimate owners of all Oblivion resources.
2. Ethical, Common Sense and Community practices and public shun:
Here it is were the 2 sides have drawn battle lines and trenches. Let me point out that while i personally find it extremly annoying to for example have to manually TES4EDIT Clean all plugins, I understand the rationale of not uploading replacement ESPs. I may not like it but I agree with it.
3. What is the impact on our community and game experience.
Well here is the tricky part:
a. for mods that are actively worked on, and or have strict, explicit perimission policy, they must be respected by the entire community. And I do believe that this is an unanimous opinion or it should be.
b. for seamingly dead mods or absent modders:
here we have a HUGE inequity. Because savvy modders, can and will modify/fix/patch them for their own use. The others have to either use the flawed or unplayable version or simply not use it.
However, the bottom line is that only us as a community, under the benevolent supervision of Bethesda, can and should address this issue. However as there are currrently 2 sides that will never reconcile we have now a conundrum that will probably be solved in the favor of the strictest faction, for the simple fact that this was the status quo before and it will be in the future.
But in the end I really advocate for use of formalized "modding licenses" in the gist of Wrye and I urge all the community to make a united front such that any and all future mods presented on Nexus, TESA or PES should have clearly shown permision section and guidelines as to what happens to their work when they become inactive (in terms of period, methods of contacting, etc).