I agree. Yet I think you should choose your battles, and this is not one of them.
We both know *I'm not talking about using the API*. The API is out there, documented (although it was never completely documented on that blog, if I recall? and the blog itself has since died?). Clearly WotC has no problem with people using it.
The issue is the distribution of Compendium content in an unprotected format, which MP made trivial. This is not WotC stifling innovation, this is WotC protecting content which it feels -- quite reasonably -- that people should pay for before being able to enjoy.
Can you not see that distinction?
I see the the distinction on the first two, but I disagree with the third instance in regards to Masterplan. I think the WOTC lawyers are using the C&D letter to avoid going after the torrent users which takes extra work in this case because the two previous companies did not fight the letters. Both sites are hosting the data in the first two instances. So, they know they have to fold. Masterplan itself does not host any of the infringing content. True, the software collects it. But, the end user controls it, pays for the information, and distributes it without input from Masterplan. I can't speak for the Powercards, but I know Ema's site. The hosting of the data and scope of copyright infringing material provides a clear case for them as active third party in the process. Powercards seems to provide the same link by offering cards online and storing the data from what people have in posts in the topic.
Also, I agree that the API is beside the point on many levels. The real issue is content. However, I think WOTC is overreaching when it goes after Masterplan for the above reasons. It's why I label this one a bad deal for Masterplan. The reasonable enforcement action is for WOTC to send letters to the file sharing hosts, torrent hosts, and people sharing the copyright infringing material.
Another also bit, I agree with you on the protected format rule on many levels. However, I think WOTC is shooting itself in the foot with the existing API. They allow full open format with XML for character info while trying to fight the scraping technology. As long as a software developer places the choice to illegally distribute copyright infringing material on the end user, WOTC is going to find it tough to claim a distinction in civil court between reasonable usage of scraping technology for a current DDI user and the illegal actions of a DDI user violating the terms of the TOS by distributing the files.
I believe WOTC's biggest problem is the fact that they encourage users to use the API while not providing a sound basis for coders. If I had to make a good faith argument for Masterplan, I would point out; the lack of a clear policy regarding fansites, the continuing hosting of character data which is outside the scope of both the DDI terms and API limits in iPlay4e with high level characters which WOTC permits to exist, and the failure of WOTC to maintain the existing API limits in a clear/concise manner that is consistent with modern law. Both the US and the EU provide a very clear standard on what it takes to violate copyright when it comes to filesharing. WOTC has the money to keep up. It is entirely reasonable for WOTC to have a clear API and fansite policy for dealing with developers at this point.
So yeah, I agree with you on the first two letters, but I disagree with the third one. *shrug* It's all theory in the end. Masterplan is giving into them, but the effect on the community is anything but encouraging. At this point, the only real message that WOTC has for software people is..."We might not shut you down. Hey! Take our word for it." I have some google stuff that I want to do for my 4e zombie western thing. Do I want to even try a release? Not really... Even if WOTC never bothers me, I know that they are targeting people that are operating in good faith without providing a clear set of rules to develop software.
I hope no hard feelings...and all that

For me, I just hate to see a piece of software that I find useful shut down because a few WOTC lawyers choose not to fire off a few letters at the people sharing torrents and hosting files. I am all for protecting copyrights - just do it like everyone else y'know.

It's why we have laws.