Nobody's arguing that you should be allowed to take an Ubuntu image, mess it up, and distribute the result under the name Ubuntu. That would clearly infringe on Canonical's trademarks.
So it may not violate trademark law but it could dilute a trademark.
Also the section on packaging for distribution in the GNU Philosophy says requests to remove logos and names, i.e. trademarks, before a downstream party can distribute the rest is acceptable.
As I understand it, many of the most useful packages are from upstream anyway. It's mostly Canonical metapackages that define Upstream packages to install that are in question and they contain canonical logos and names
It states a couple times at least that upholding the core tenets are key. Ubuntu isn't creating scenario such that distribution is now impossible, or claiming control over the upstream which are arguably the most valuable.
Could be a good project. A Canonical free "Ubuntu" that replaces their metapackages yet results in a nearly identical OS. Problem solved.
Really one could probably just write some Ansible to do this to Debian these days.
Regardless, a solution is readily in reach for sufficiently skilled users. Given that, I have a hard time taking this as nothing more than kicking up dust for the sake of being right
It's a tricky position trying to build a company around OSS free software. On the one hand you have the principals of free software on the other you have the fact that people distributing crapified version of your software with your name still on it means you're getting a lot of support and complaints that cost money to deal with even if it's just to determine that it's Crap-Ubuntu and not the version you've made.