You're pretty much spot on. After taking several copyright courses in law school, I can definitively say that the whole area of law is a clusterfuck. Even the seminal cases aren't consistent, let alone those on the periphery. Sadly, most of the closer cases seem to come down the a single judge's gut feeling. If either side has deep enough pockets, they can force the case to come down to a panel of judges' gut feelings, but even the Circuit courts hold wildly inconsistent rulings. I'm not bashing judges here: the law here isn't so much a guideline as it is guide posts. It's not surprising that there's not much consistency.

It's really frustrating for anybody trying to create. It can even be frustrating for the lawyers trying to practice in the field. I ran across this insightful, if slightly biased, post by William Patry, a fairly famous copyright lawyer, explaining his decision to shut down his personal copyright-based blog. He explains the decision as being partly motivated by the landscape of copyright law: http://williampatry.blogspot.com/2008/08/end-of-blog.html