The editor's response reveals a lot about her understanding (or lack thereof) of the business she's in. Normally I'm willing to overlook small typos in blog posts -- but when you are an editor, and you are writing an important response on an important issue, it's not wise to get the punctuation wrong on the
very first word. (It should be "it's sad", not "its sad".)
That she continues not to use apostrophes throughout the post and gets other things wrong ("I never ment to hurt"), pretty much sends the message that "I don't really know what I'm doing" and "I just don't really care." If, as an editor, she doesn't understand basic rules of punctuation, then is it any surprise that she doesn't understand copyright?
If, as she claims, the magazine is going to go out of business, the real culprit is the editor's lack of knowledge about the business she's in.
After all, we wouldn't feel sorry for a chef who had to close his restaurant after it was revealed that he was violating health codes. Why should we feel sorry for an editor who still doesn't understand copyright, even after having gone through this whole episode?