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Personally, I'm saddened by Google's loss, not that I'm one of their big fans. It was a bold and visionary attempt, and you can't make an omelette without breaking any eggs. This is just another in a string of failed attempts to tackle the problem of orphan works - the US Congress may be the best place to solve it, but they've had a couple of goes now without producing anything.
It's clear that the root of the problem is the nature of commercial exploitation. Private individuals being able to access orphaned, out-of-print works over the net on a non-profit basis is good, commercial entities being able to resell those works without providing compensation is bad. This is what really needs to be tackled.
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