I think the problem is not that they are moderating these levels, it's HOW they're doing it.

Rather than sending a note to the creator saying, "we've taken down your level, please fix it and resubmit", they're just completely nuking the level on both the public server and the private users PS3. It's not like they couldn't see something like this coming either...it doesn't take a rocket scientist to figure out an easy-to-use editor will spawn a plethora of copyrighted material recreations.

And what about that God of War level...doesn't Sony OWN that copyright? And if they do, are they going to sure themselves?

http://www.youtube.com/watch?v=p-s_TAgM2_M