abortabort: I don't believe it is theft. He is not 'stealing' an image, he is using an image that is FREELY available to him and then manipulating it for his own personal use. What the photographer is selling in these cases is prints.
It is like having 'samples' at the grocery store and if someone 'tries' one and then doesn't buy the product, are they stealing? What if instead of tasting the meat sample, they take it home and put it in a sandwich that they enjoy and sates them, are they stealing because they don't feel the need to buy more of the product beyond the 'free sample', even though they have modified it to get further enjoy it.
What if they took the sample and cropped it rather then removed the watermark - is that less outrageous?
Next question, someone BUYS a high resolution copy of the image and then crops it themselves before putting on facebook, is that theft? If not, than doing the same thing to a 'free sample' is also not stealing.
@abortabort, the situation that you described is a matter of a contract between two parts. Consenting adults so to speak :). If you don't like the deal don't close it. Period. here we were talking about something that is happening without the consent of the owner. If you care to look at the prices of the equipment on this very site you'll understand quickly that photography can be a costly hobby. So you pay the money for the equipment, spend the time taking and processing the shot and than someone is just taking it away without even asking you and in some cases without even mentioning you or worse claiming that he's the author.
@dccdp ... You look at this as a matter of property rights/loss of potential income. I regard it as simply a question of honesty. If there was a watermark (and This is what we're talking about) that means that whoever the owner was did not intend it for free use. Ignoring his/her wish is dishonest. In particular if you're making money of that. Speaking of which you don't need HIREZ photos to make money. I found photos of mine used as internet ads for small hotels. The 800x or 1000x is sufficient for that. I never made any fuss about it but I wonder... if I ever land at that hotel would they offer me a free coffee? I seriously doubt that.
So if you BUY a Rembrandt is it OK to cut a piece of the painting and claim it's yours ?
Not only better then the winners but a great photo in its own right (regardless of competitions etc.). Congratulations.
PS. I din not submit an entry nor did I vote in this contest (right now I wish I did vote)