People have been using extensions to add website thumbnails to search results for years without a peep from web developers screaming copyright infringement.
Why don't I see you complaining about them providing textual context to the term searched for? Oh, right, because every other search engine on the planet does it. So now that Google is adding by default something that extensions have had for a while now, a graphical context in addition to text, you suddenly think it's evil?
The amount being copied makes a big difference, in terms of fair use. If you're copying the entire page, and showing it to people, then that's a more egregious violation than taking a small snippet to provide context.
I'd also say that Google's caching is a copyright violation, and should be opt-in. Google seems to have this notion that because they're above the law when it comes to copyright. They're not. They may be doing this for good reasons, and it may have positive effects for the users of their search engine, but that's irrelevant. The law is the law.
Also, I never said that it was evil. I only said that they shouldn't do it. There is a wide gap between those two assertions.
*Edited to change "provide text" to "provide context" at the end of the first paragraph, and remove an unfortunate use of all caps. Wasn't thinking as clearly as I should have been, sorry.
It's a large thumbnail where the text isn't legible at all outside of a few select words and the extracted surrounding text. This isn't the same as providing a full-page preview with Google wrapping it in an iframe, for example, to get advertising revenue. People still have to go to your site to read anything outside of the contextual text.
First of all - majority of users don't use extensions. If 0.1% of people see my content stolen somewhere - fine, take it, I don't care. If 99.9% of users suddenly could see my content on Google - hey, that's a BIG problem.
Second - thumbnails are small and unreadable - they are fine. Google adds READABLE content to their results. That's infringement. Especially since content is cropped around the subject user searches for.
You can read the text on the preview on the right aside from the extracted portion? Because I'm pretty sure you're the only one. I can only make out the site logo, the headline of the page, some button text, and an odd word here or there. It's just a contextual image just like the surround text of the search phrase is contextual text.