I don't see why the "right" thing would be to reward someone for breaking your ToS and stealing your database as a means of creating a potential competitor to your business.
On top of that, even if PadMapper had not been slimy, I don't see why it's "right" to pay a sum for something you're perfectly capable of building yourself for less time, money, effort, and headache than what an acquisition would cost.
No, of course, it's not like Craigslist has done some damage to PadMapper and now needs to buy them as recompense or anything. But buying them would be the... gallant thing to do?
That is, it isn't so much what Craigslist "needs" to do to be in the right, here, but it's what they could do to be in the very right. To be better than any other random classifieds company, to generate viral PR, to be something you'd be happy to say you use, etc.
Being gallant doesn't make you better than other random classifieds companies. It makes you more gallant. That might be worth something to a few users, but it doesn't seem like the majority care.
This has been asked and answered numerous times here, lets not have to go over this again. PadMapper was using CL data without a license, they are not 'reading it' they are republishing it in their own app.
Well, since you've clearly been over this more carefully than most of us, maybe you could be troubled just a bit to elaborate on these questions one more time:
* Is it clear that the kind of data that craigslist published can in fact be "owned"? Because no matter what their terms claim, the legal analyses I've read aren't positively conclusive.
* Why is what Padmapper did any different than a search engine? Contrary to some assertions, PadMapper was not republishing listings wholesale -- they published digests (making the ownership issue even less tenable) along with hyperlinks, which sounds a lot like a search engine to me (pretty much what they are). Or even a typical anchor tag itself: the contents of such a tag are generally a digest, the attribute presents the hypertext.
* If you agree these activities are something people shouldn't be able to do without permission, are you fine with a web where search indexing or even linking is essentially by agreement only? This is not an academic question, btw -- there have been lawsuits over linking: http://www.salon.com/1999/08/12/deep_links/
But that data doesn't belong to Craigslist. To the extent it's copyrightable at all, it belongs to the user who posted each ad. And even then, PadMapper only reproduced a minimal number of facts on its website: price, location, subject line, number of bedrooms, whether cats/dogs are okay. They linked to CL for the full ad, so no copyright was infringed.
On top of that, even if PadMapper had not been slimy, I don't see why it's "right" to pay a sum for something you're perfectly capable of building yourself for less time, money, effort, and headache than what an acquisition would cost.