Google: a Glass-House Dweller re: Misleading Notices?

Google, Others Contest Copyright Warnings , today in the WSJ, notes a pending complaint that the Computer and Communications Industry Association (CCIA) , a trade group in which Google, Microsoft and others are members, is filing about copyright notices that, according to the CCIA, mislead users by not noting legitimate fair-use reproduction rights. What Google’s role, if any, in the complaint is not entirely clear, but it certainly seems ironic that Google is being associated with this complaint, at the same time as they are putting putting highly misleading notices on scanned public domain works:
The Google notice, found as page 1 on downloadable PDFs of public domain works available via Google Book Search, “asks” users to:

Make non-commercial use of the files. We designed Google Book Search for use by individuals, and we request that you use these files for personal, non-commercial purposes…
Maintain attribution The Google “watermark” you see on each file is essential for informing people about this project and helping them find additional materials through Google Book Search. Please do not remove it.

There is clear U.S. precedent that scanning a public domain work does not create a new copyright so there seems to be absolutely zero legal basis for restricting use or forcing users to preserve inserted per-page watermarks-cum-advertisements.
In previous email-list discussions some have argued that Google is only “asking” users to not do these things. Yet putting the above in a sternly-worded “Usage Guidelines” notice (containing phrases like “Keep it Legal”) certainly makes it sound like it’s intended to convey to users the impression of restricted rights. And it hasn’t been entirely clear whether Google is claiming contract-based usage restrictions between it and users of Google Book Search.
So Google: which is it? If I make commercial use of one of these files or remove Google’s watermark advertisements am I violating a contract with Google or otherwise breaking any laws (in which case terms like “ask” and “request” are disingenuous)? Or, am I not in violation of anything legally (in which case your current notice seems at least as misleading as anything being complained about)?
Personally I hope that the latter is Google’s position and that, in the spirit of “do no evil” and to avoid undermining the FTC complaint it may be backing, Google will revise their notice to make it clear that it is perfectly legal for users to make commercial use of their files and/or remove their per-page watermarks.
My position is based on the principle that what’s in the public domain must stay in the public domain. That a deep-pocket corporation chooses to pay for digitization is meritorious but doesn’t give that corporation the right to dictate subsequent usage. If that company is the prevalent entry gate for discovery, and so can arrange that “its” copy of a work, rather than any other digitized copy, is the most widely utilized, the potential for undue corporate intrusion into the public domain is obviously even higher.