I'm actually kind of torn over the result in this case. On the one hand, it's great that the court adopted an expansive view of fair use. In particular, I'm glad that the court strongly approved Pierre Leval's transformativeness test, which is a great standard for internet services that use copyrighted works in innovative ways.

On the other hand, you have to admit that it's weird for the students, who are forced to submit their personal works to this third-party service.

Consider an analogy: your startup got a great valuation from a VC, you're signing the papers, and suddenly the lead partner says to you, "Oh, one more thing. You have to submit copies of all of your software to Microsoft for archive purposes. But don't worry, they promised not to do anything with it!"

Sure, Microsoft will probably just leave your source code on an archive disk and never look at it. But still, it's a weird feeling.