I think the original idea behind copyright was protecting things that weren't necessarily tangible objects that could be stolen. Lets pretend someone writes a book...Without copyright, someone could take one's work, erase the original's author's name, slap their name on the cover instead, and print up a few hundred copies. It's not "stealing" all of the copies that were published under the original author's name, but it still is "stealing" the energy that the author needed to create the book. Just because there are plenty of copies floating around with the original author's name doesn't justify anyone else publishing the same book under a different name (at least not while the original author is living)...It's nothing like robbing a bank. When you do that, you take something from someone else and they don't have it anymore.
That said, as much as I want to cheer copyright on, I truly believe it died when the Internet was born. Legally, it's still very much alive and should be respected, but with the world-wide mass-distribution available at a click of a finger, it died. x_x;;; Unless you are a business owner! Business owners usually follow the copyright law so they won't get sued, and I've noticed a lot of artists are starting to target their stuff towards them instead of the greedy public. ^-^
Not sure where I'm heading with my post (I'm getting sleepy..ZzzZz)...But he had all the right to flag your video! : o