The above-hyperlinked post argued very well on behalf of the anti-plagiarism service.
Many commentators noted that the American copyright system is focused on the monetary side of work of authorship. It may be so mainly because the American copyright system has developed with the entertainment industry’s interest as the priority concern.
Policy-wise, I’d side with the French style copyright system that values the moral rights aspect of copyright. As people create more and more work of authorship on Internet, moral rights side of copyright gains more significance.
Suppose someone copies my writing on this blog and posts it on his own blog, I’d be offended not because he earned monetary benefit but because my moral rights were compromised. (right of attribution, to be specific)
In the anti-plagiarism service case, I’d agree with the student if he were offended by the fact that his original work of authorship had to go through an automated censoring system. There is no moral right that specifically renders the copyright owner to prevent others from suspecting the work’s authenticity. So, maybe the student did not find the most politically right cause of action.
But, you know, as you learned in law school, you want to hang a clothes, you make a hanger. Probably, his attorney thought copyright violation claim was the strongest.