As Mark Frauenfelder and others have documented, the Guthrie family and probably Woody himself think the JibJab parody just fine. In the words of Grandaughter Cathy Guthrie (pictured here), "this parody was made for you and me."
But here's the thing: much of the JibJab Brouhaha was actually caused by a lack of author's rights....
I'm not speaking heresay: the point is that who controls the rights can matter as much, if not more, than what the rights are. Here, its publisher "The Richmond Organization" (TRO) and not the family, who controls the rights to "This Land." And Richmond's reaction was the opposite of Cathy's: "The damage to the song is huge," said Kathryn Ostien, director of copyright licensing, because "this puts a completely different spin on the song." (Why "different spin" = "huge damage" I'm not sure).
Yes, authors and creators can suffer fits of pique that can hurt the markets for secondary works. But their reasons for asserting copyright can be the subject of reasonable disagreement (example, colorized films). All that's a peppercorn compared to the historic abuses of copyrights controlled by publishers and disseminators.
The present tension between consumers and copyright is predated by a centuries-old war between publishers and authors. Those who read this site ought think carefully about how often the public and authors are actually on the same side.
This conflict between publishers and authors is exemplified of course too by the conflict between "U2" and Negativland, especially as expressed by the Edge.
Peter Jaszi, in "Toward a Theory of Copyright: The Metamorphoses of Authorship,'" 41 Duke L.J. 455, 468-469 (1991)(footnotes omitted)(pdf), identifies the very source of this conflict in the passage of the first copyright act:
"Authorship" first entered the domain of law in 1709, with the passage of the first copyright statute, the English Statute of Anne. While new to law at this time, however, the terminology of "authorship" had already acquired meaning in the realms of literature and philosophy. These early associations of the "authorship" concept helped to establish its place and ensure its persistence in the copyright doctrine.
Although labelled "An Act for the Encouragement of Learning," the statute was, in fact, promoted primarily by the London-based fraternity of British publishers (then designated "stationers" and "booksellers"). Throughout the previous century, the publishers had the book trade comfortably to themselves as the result of a bargain struck between the Crown and their venerable publishing guild. The Honorable Company of Stationers had received a monopoly over publishing in exchange for a promise of rigorous self-censorship, including the suppression of treasonous and seditious materials. By the century's end, however, this old order had effectively collapsed, as established publishers faced unprecedented competition from domestic and foreign pirates. Their preferred solution was to solicit legislation that gave the "proprietors" of "copyrights" a right of action against those who trespassed on their literary property. The publishers expected, of course, that in most instances, they would be the "proprietors."
As the campaign for new legislation gained force, however, a problem of legislative draftsmanship remained: How would the new statutory rights get into the hands of the publisher/proprietors? Although the rights could have been awarded to the publishers directly, the chosen solution was to vest the rights initially in "authors," with the understanding that the publisher eventually would assume control. Before and after 1710, publishers typically purchased writers' manuscripts for lumpsum payments; such a purchase included the writer's "right of first publication," and after the statute, it also entailed a transfer of the copyright itself.