The romantic in me hopes not! These are now doing crazy things with MK10 (i am amazed how i find the story line just getting better and better). I hope they can appreciate the hacker in these folks from their own early days!

Aren't trademarks dependent on enforcement? i.e. if you allow your mark be diluted[1] by projects you like - you will have a harder time down the road defending against use by projects you don't like. So the best strategy is to go ape on everyone, including those you like. IANAL.

1. e.g. Kleenex

I have heard this. But if that’s the case, and you liked the projects / developers, couldn’t a highly restricted licence be granted to the project?

A $1, non-profit, licence that can be modified or removed at anytime. It could even have an NDA attached so it can’t be publicly discussed.

Maybe they wouldn’t accept that. But it seems like there should be a way to officially allow a project like this to exist without enabling other groups that are not guided by motivations the licence aligns with.

There are ways around this, including cutting them a license, or ignoring it.

They're distributing their changes as a patchset to the ROM, which is completely legal. As a result, they aren't distributing binary files; other hosts are.

They are using the Mortal Kombat name and trademark which they are most definitely not licensed to do.

That's not copyright infringement, that's trademark infringement. They're two entirely separate concepts.

The logos are copyrighted.

Doesn't copyright also come with fair use clauses?

Copyright is not the same as trademarks