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I'm an intellectual property attorney so this thread interested me.
The situation seems straightforward to me, assuming that Baen actually had the rights to distribute the CDs and authorize copying Bujold has no LEGAL right to demand that anyone take down the files. (Whether people want to do do out of repect for her wishes is entirely another issue).
The files were licensed under a VERY weak license ("This disk and its contents may be copied and shared, but NOT sold. All commercial rights are reserved. That’s it.") and make no mention of restricting the sharing to single persons rather than the internet. Either she misunderstood what she was signing in which case she should have just been more careful in the future or she truly believes that Baen doesn't have the right to authorize distribution over the internet in which case she should be suing them for damages.
Obviously this is purely for discussion purposes and not legal advice for anyone.
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