It seems like at least parts of the government argue that any government copying is inherently fair use http://www.loc.gov/flicc/gc/fairuse.html

Fun fact, the government opinion for patents for the government and its contractors is also that the federal government cannot be found to infringe on patents either. At most they say they voluntarily choose to provide reasonable compensation. This especially applies if the use of a patent is deemed to be in the interest of national security.

The U.S. has waived sovereign immunity by statute for various classes of suit.

Apparently so, according to the university's defense they have sovereign immunity so its no biggie.

This was in state court. Federal laws may be different.

Whose role is it to enforce copyright?

The US government has sovereign immunity, just like Texas claims here. The difference is that a Federal court can overrule a state's SI.

Nobody can overrule the federal government's SI, meaning the federal government cannot be sued for any reason unless it agrees to be sued and forfeits SI in that case.

How do people not know this?