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(This must be this month's "hot topic" in the Perl world - this is the third place where I've seen the discussion)
IMO you did exactly the right thing by pointing it out to the school. You should probably inform O'Reilly as well.
This is, of course, a problem that publishers will have to deal with more and more as the trend for electronic versions of books grows. Manning are currently trying to shut down a person in Israel who will happily email a PDF copy of my book to anyone who asks for it.
Once you put anything into an electronic form the concept of theft becomes a bit vague. It's impossible, for example, to steal all the ebook copies of Data Munging with Perl. Some people seem to use that argument to imply that it's therefore not theft. I, and I hope most other book authors, would argue that by making electronic copies available then some people will be less likely to buy copies, thereby effectively stealing income from the publisher and the author.
A fundemental part of the free software world as envisaged by Richard Stallman was that the software should be free, but that people should be able to make a living from selling training, consultancy and books. If you take that away, then the free software movement starts to look a good deal less attractive.--
"Perl makes the fun jobs fun