I'm almost certain that by today's legal precedence, Google is breaking the law in hosting this video. Since it was linked to by Waxy, it's getting blasted with hits right now probably.
This sets a great precedence for others to do the same thing. I think that's a good thing because this case is not harmful. The audio quality is poor, the video was made for human intent not commercial intent, and if anything it helps remind us of washed up music that may have no other promotion right now.
Sometimes it can be harmful but I just don't see ANY harm whatsoever in this case. Why let five record companies with a bad record determine the entire use parameters for all of the audio in the world? Sometimes change is inevitable and just happens because it must.
This is a contemporary fair use case at its finest. Hopefully Google has the footing and wherewithal (and desire) to help redefine the parameters.
There is a load of stuff on Google video: whole performances from the BBC music show Top of the Pops, bits of BBC dramas and comedy... I thought everything was pre-vetted by Google? If so, how has this material ended up there?