The latter is obviously illegal, but I am an advocate of the GPL and don't take issue with someone extending GPLed code for internal use and not releasing their changes. The point is to maintain user freedom of software, and if the users are the company itself modifying it and never distributing it to someone without source access, even if they never make it publicly available, that is still ethical.

I'd like them to share the information they create, but I think it steps on others rights if you start trying to force disclosure of information creation.