The whole intellectual property vs hot-linking is a bit of a complex issue.
On the one hand, you can argue that hot-linking is legit; you place a file on a public web server and it responds to http requests. The difference is between
<a href=... and
<img src=...
One could even argue that since your images aren't copied that there is no copyright violation.
Of course, its obviously unethical. If I create a site and use the images from your server, then I am gaining the benefit of your public files at your expense.
What if instead of including (img src) your images, I provide links (a href) to them? You'd probably prefer that I link to your page that includes your image. But ethically, where does that put us?
Beyond images, what about people who hot-link javascript or css?
Services like the one you mentioned simply check the referrer of the request (as such, they can't 100% effective). You can also include code on your server to look at the referrer, and if its not your site, take an appropriate action.
Some site owners like to use the infamous goatse. Others replace the image with ones asking the hot-linking site to stop stealing bandwidth (
http://images.google.com/images?q=bandwidth%20theft /
http://images.google.com/images?q=hotlink). And, some simply return errors.
Many, like me, think the best way to deal with this is on an individual basis. I don't think we need regulators involved. There are so many gray areas in the issue that the courts would just bring the web to a screeching halt or increase administrative costs.
Imagine having to get permission to link to pages. We already see people crying about deep linking, or crying that links are preventing people from being forced through doorway pages, and other absurdities. Do we want regulators controlling how we write html?
