There are lots of forms of copying where the copying itself is legal under copyright law. However, the DMCA made it criminal to bypass copy-protection mechanisms, even if they copying itself would otherwise be legal. That's what the exception was for.
That said, the exemption was to allow legally bypassing the copy-protection mechanisms; that were preventing otherwise-legal copying. Once they bypassed the mechanism to get a non-copy-protected copy in 2003-2012, they may continue distributing copies of it now, since the act of copying was/is legal; it's the act of breaking the DRM that is once again forbidden.
It seems that the ruling might be a few years out of date?
Nintendo? They are hard on shutting down ROM sites yet almost all of their catalog is up on IA
The last time this came up on HN, I was able to find the information. But it doesn't Google doesn't seem to want to share any information with me about it right now. Maybe because it's older than six minutes.
> was officially designated as a library by the state of California in 2007.[notes 6]
Their About page talks around this though doesn't address the point specifically. It's the best reference I can come up with right now:
Now Youtube and their in-house pseudo DMCA is sketchy.