More information on this unfortunate precedent-setting litigation is available on Turnitin's Wikipedia entry. I was very much dismayed but not entirely surprised by the rulings.
So, when you copy somebody else's work (e.g. a song) for personal enjoyment, it's an outrageous crime; but when you copy a student's essay for profit, it's fair use. You're right, it's not at all surprising.
It's copyright infringement by you, the person who made and sent a copy, not by me who just received it. If you look at the lawsuits, they're all convicted because they uploaded, not because they downloaded.
Has anyone ever been convicted for just downloading MP3s?
Besides, there's obviously a difference between receiving a random essay from a person who claims to own the rights (that's obviously in their TOS), and asking to download an MP3 of some band. In the latter case, the downloader obviously knows the copy is illegal and it can be argued that (s)he's abetting the infringer.