IANAL, and I'm not a huge fan of copyright (life plus infinity anyone?), but I disagree with you here.
Seems to me that the judge grossly misused the 4 aspects of the copyright text.
Transformative doesn't apply to the use of the work, it applies to the work itself.
There is no "good faith" use defence against copyright infringement.
The "factual" nature of the photo is a red herring. Yes, the photo is "factual" in the sense that you could go to the same spot, with the same camera, on the same day of the year, and take a photo with the same settings and create a photo with incredibly similar characteristics. That would be non-infringing, because of the "factual" nature of the work. That the work is a photo of the real world doesn't make it immune to copyright.
Previous publication does nothing to diminish copyright.
I also disagree with the "didn't hurt the market" argument here. Thing is, AFAICT, that website is part of the market for the photo. Furthermore, that the website didn't onsell the photo is irrelevant - the website is the copyright infringement.
Attribution is not really the issue. Don't use photos that you didn't take yourself, unless you have acquired permission to use them. I am moved to make this point because I have the impression that many people actually think that "giving credit" somehow immunizes them from damages for copyright infringement.
Some readers of this site think it is okay to use google image search, and then do whatever they please with the images they find. Photography copyright is very trivial for a lot of people not into photography. I compare it to China's policy of software copyrights: willful ignorance. Even when it is explained, it is ignored. I can't explain it to them, and I can't understand their stance either. I get frustrated, and have to let it be before it becomes hostile.
Yeah, dude didn't get to use the photo or anything as a result of the ruling. The legal question was about his actions before he took it down. Judge decided his choices were reasonable and fair use.
Dude still took it down as soon as he knew something was up, and he's still not using it.
Also, the infringer swiftly complied with the takedown notice.
So, don't go around using non-attributed photos :)