I agree that this was handled very badly, but I never had the impression that PPaint was public domain. I thought it was on Aminet under a specific, Aminet-only release, and further distribution was not allowed so a separate agreement would have been required for inclusion in Amikit for example. Perhaps that agreement (if there was one) is still in place? Anyway, it's not like it was ever going to be hard to find a copy of it somewhere...
Well, at least it is still available from a webpage which carried information about the updated version which was the aim I guess, so hopefully people will accept that and move on. At the end of the day, it is very positive and I'm delighted that PPaint is being updated. I still use the version given away on a cover CD many years ago, and the updates would be quite welcome to solve a couple of little problems it gives under OS4.