When I texted Sam Ramji to let him know about Sandcastle, and he quickly texted back that he would look into it, I figured that a) it hadn't yet hit anyone's radar at Microsoft and b) that he'd fix it.
Fix it, he did. As Mary Jo Foley notes, it was "doubtful [that] Microsoft was willing to risk the wrath of the OSI over a documentation compiler." I'd go one step further. Once alerted to Sandcastle's violation and to the importance thereof, it was doubtful that Microsoft's Sam Ramji and Co. would be interested in the code, however important/non-important it might be.
Sam gets open source. He's not always supported in this understanding by the larger Microsoft entity, but Sam gets it. His apology to the OSI is direct, concise, and appropriate:
This is unacceptable and represents a violation of Microsoft's Open Source policy. I take it extremely seriously.
I have directed the project to be unpublished from Codeplex immediately, including removal of the project's use of the Ms-PL. If the team chooses to publish the source code and follow Microsoft policy, then the project may be re-published in the future. If not, we will remove all references to Sandcastle from Codeplex.
I apologize to the OSI on behalf of Microsoft for this mistake.
In Sam's defense, this sort of thing is not uncommon in open source, including on Sourceforge. Open source is a (mostly) self-policing community, and Microsoft, to the extent that it continues to participate, has become a member of that community, with all the benefits and bile that come with it (mostly benefits :-).
ExtJS is a recent example of a project that went through some gyrations on licensing, took some heat for it, and ultimately settled on a coherent, open-source friendly result. I doubt Jack Slocum, its founder, liked the process, but I think he managed it exceptionally well. ExtJS, like Microsoft and all of those (including myself) who have undergone processes like this will be the better for it.
So, well done to Sam and team. I appreciate your integrity and your respect for the OSI and open-source principles. Now please share that with the rest of your company. :-)