If we think of Svbtle not as a blogging engine, but as a company with various commentators/channels, this is quite obviously ethically wrong, and possibly legally wrong (I can't imagine I'd last long making a site called "BBBC" and using all BBC branding).
Having said all that, it validates the demand for Svbtle - why not start charging for people to use the design (perhaps with some distinct branding to indicate they're not part of the official "Svbtle network").
// Some afterthoughts
It's clear that all design is about inspirations, and you can see the Drawar (http://drawar.com/) inspiration in Svbtle. However, just because Svbtle clearly has design influences doesn't mean simply copying Svbtle without making your own changes (just as Svbtle has) is okay, particularly when you are stealing their brand name as well.
I'm not sure if Svbtle itself is WP-based, or whether the admin section is similar, so perhaps some innovation has been made there? Nonetheless, an effort to distinguish itself (and potentially acknowledging the original influence) seems important.