This last point, which is not really an argument, is probably at the root of it. Publishers are scared, and rightlly so, of Google and the entire Internet, which is a threat to their business model. Publishers are middlemen and the net generally serves to drive them out of business with much cheaper and often nbetter alternatives (like Craigslist is doing to newspaper classifieds). I happen to work for a company that is owned by one of the largest publishers in the world, and they are scared, so I guess it's reasonable for a one-person company that is run out of a living room to be scared too.
- It's a copyright violation to scan the whole book (arguably true, but the argument applies equally to scanning web pages, so if this were to hold it would put search engines out of business, not good for anybody).
- Serving up excerpts is not fair use (seems false to me though I suppose there's some legal case to be made)
- Once they serve up excerpts they will then go ahead to serve up entire copyrighted works without paying the copyright holders (certainly a false argument; they could obviously be sued if they started doing that).
- It's rude of them to mess with copyrighted works without asking permission first (not a legal argument, but true as far as it goes. Google seems to be pissing people off unnecessarily).
- Google is a huge behemoth with a $400 stock price, whereas small-press publishers is a tiny, marginal, we-do-it-for-love operation, and they are afraid of getting crushed under the wheels.
Publishers are not mere middlemen, they can add a lot of value by finding, nurturing, and promoting authors. A lot of the infrastructure of the counterculture is associated with threatened old-media microinstitutions like independent bookstores and small publishers and magazines. These marginal economic activities provide a living to a multitude of authors and middlemen. If all this is replaced with a structure that consists of unpaid content creators (bloggers) and huge technocorporate behemoths (Google, telecoms) that is not necessarily an improvement. Content may be more diverse, but all the money flows to the big entities rather than the creators.