Then people get to use the models that stole her work and crashed her site to sell derivative works right next to her booth?
Art != business. They are separate things and only heartbreak will ensue when you operate on the assumption that artistic values is business value.
If what happened to my wife happened to Warhol the equivalent would be someone tearing his paintings off the gallery wall and selling xeroxed versions with sharpie written over them.
However your ultimate points are that art can’t be business, which in turn means artists shouldn’t necessarily be compensated, which defies reality and morality.