The real issue is that they don't want their content in Google News, but they also don't want to kill the golden goose that is directing traffic to their site. I.e. Google News is generating traffic for them, but they don't want the content to be on Google News either. They want to have their cake and eat it too.

edit: 'they' here refers to the old media newspapers, more specifically to Mr. Murdoch.

There's a big difference between copying content and linking to content. I don't think anyone has a problem with Google linking to them: that is after all the purpose of a search engine. But Google doesn't just link, they copy full content into their site, giving users no reason to click through to the original creator.

And Google doesn't let creators opt-out of just the content-stealing part of their scheme. If you want to be indexed by Google, you have to allow them to copy whatever they want from your site. And no one can actually opt-out because Google is a monopoly in search. So they get away with it, stealing pageviews from content creators.