They are breaking ip law, but it doesn't matter. Stinc has much better things to do than start a legal battle with some Podunk site.
Steemit.com will eventually be phased out for one of the other frontends anyway. Why waste time working on a frontend when you can focus on the backend to attract hundreds of developers to the platform who will basically work for "free". SMTs will be amazing value creators.
This is a very good point. If they ever intended steemit.com to be big and eventually challenge other major social media sites it would make sense to protect what is theirs, though like you suggested, perhaps the plan is to let steemit.com die on the vine... shame.