unfortunately for individuals that is bullshit, and it's not a grey area, Copyright is currently aproaching 100 years (compare to the original 12+12 upon request) from creation and after that it enters the PD compare popeye (been in the PD a few years now) and mickey mouse (enters PD in a couple of years unless they get ANOTHER extention) you can legally copy pop's image you cant copy MM's. Archival fairuse was NEVER intended to cover copies made by individuals and distributed, back up provisions require you make the backup yourself (no downloading) so no matter which way you look at it "abandonware" is a false premise

I didn't say all uses of abandonware were fair use, I merely stated that it would automatically be copyright infringement, which is clearly the case. People have actually successfully defended the right to do exactly what I stated, in court.
I do agree that the copyright contract has been broken. I disagree that use of abandonware automatically copyright infringement. Even some commercial uses have been successfully defended under fair use, e.g. http://en.wikipedia.org/wiki/Campbell_v._Acuff-Rose_Music,_Inc.
Non-commercial copying for archival or academic purposes are generally safe (see the MAME project as an example: http://mamedev.org/ ).

hmm didn't they win on parody protections not fairuse? same reason that the banned Penny arcade comic isn't actually banned they just took it down cause they didnt fancy a court case..

Like I said, Fair Use is an affirmative defense. You have to prove it was fair use, the parody is considered part of Fair Use. You asked if anyone would actually be willing to stand up in court and claim Fair Use on material under copyright, well Fair Use only applies to copyrighted material, by definition.
You're right about the Strawberry Shortcake/Penny Arcade thing, they didn't want a court case. Also, that one was a case where the copyright holder (American Greetings) wasn't the principal target of the parody, American McGee was. Typically parody cases of that nature have been losses for those asserting a Fair Use defense (there was a few precedents, none are coming to mind, though).
A lot of cases have been won over archival, to the point that I don't think most rightsholders are willing to bring one without something to weaken the Fair Use claim (like material profits). The wikipedia article I linked is a great jumping off point.
A lot of money gets poured into campaigns to make us all believe that copyright is supreme, it's simply not always true. I'm not saying that running a The Pirate Bay type of operation in the US is not going to get you hammered, I'm just saying comparing some dude sharing a cam of Inception on TPB during opening weekend is way different in the eyes of the law than distributing or receiving abandonware (famously Fair Use cases nearly always consider motives and audience, as well as potential lost profits).

I'll just copyright out of here. <starts running>

Wow, I didn't think that my post would generate this big of a response.
I have to say that I'm surprised to find that abandonware is (sort-of) illegal .
The thing that bothers me most about the legal matters of abandonware is just how backwards it is. Let's say you're looking for an old game, but you can't afford to buy it from sites like eBay and Amazon because they cost twice what they were when originally released. However, I can't download that game because a company holds the rights to it, and downloading it would be against the law.
However, the game isn't being sold in stores anymore, and the company has no intentions of re-releasing the game for sale (for download, not retail), or putting the game on their site to download for free. Instead, they just sit on the game, not offering for purchase, and imposing legal action to those who download it illegally.
It doesn't make any sense. You'd think that if there were a big demand for that old game, the company could cash in on that, but they don't. Maybe it depends on how big the demand is for the game, or maybe it relates to whether the actual creators will allow their game to be sold or not, but it still doesn't make sense to me.
I'm sure that there's a lot of people who are reading this post and know about all the legalities that are involved, and I'm honestly sorry if this seems off-topic to the rest of the conversation, but it's just that I don't understand the mentality of companies who own the rights of games, but never use them.
Also, I don't mean to change subjects, but the other intention of my question was regarding the games that GOG does have the rights to release. How come they haven't released certain games yet, like the first three King's Quest games or the Police Quest series? Does compatibility play a role in what games are added to GOG. By that I mean, are there games that can't be added because they can't guarantee that they can be made to run on modern systems?

one major problem is that you can't prove that they don't plan to use it at some point in the future a few years ago most of the games in GOGs catalogue were considered "abandonware" hell alot of the sites still have them available (though i will admit the more reputable sites remove them as they are re-released/remade)
Games available on GOG are tested with modern operating systems and in some cases tweaked to work. One of the main problems is probably that DRM free executables don't exist for many games and publishers are unwilling to share the source to have one compiled.

You're assuming they even have the source, they may only store the gold master and the developers may not have used source code control (if you can even find one that has a backup, the original source code to Adventure was unearthed last year on someone's random backup, it had otherwise been lost). The gold master is used for pressing discs so has the DRM on it already.
I paid over 130 bucks on eBay for cartridges of Phatasy Star 1-4, now 2 is available on XBox Live Arcade for about 5 bucks (2 is the best one, by far). Abandonware has many definitions, the commercial viability of a product changes as technology changes (without XBox Live Arcade I would still be one of the few owners of a working copy Phantasy Star 2). Generally, imo, I go by two rules: 1) Can I get it commercially, first hand (no rightsholder makes money off of second hand exchanges), 2) Can I get it in a reasonable format for a reasonable price? If the answer to both questions is "No" it's abandonware in my book. Its status may change if the answers to those questions changes, but you can't assume everything will eventually be exploited commercially again.
I actually consider it a crime against culture that something like the source code to something like Adventure was almost irretrievably lost (and thereby the original version of the game as well). In my not so humble opinion abandonware enthusiasts perform a valuable service to the public commons (though they don't always have source code, sadly).

Amazed you came back. Would have thought all the idiocy would drive you off. Good for you.
As for the morality/ethics of "abandonware": That is a problem most people have. People are under the assumption that the law should be based on morals and ethics and crap. In a perfect world, maybe. But I'll just cite the simple case of "Steal a loaf of bread to feed a starving child", and leave it as an exercise for the reader to figure out why that would be so problematic for making laws based on morality and ethics.
As for "cashing in": Here is the problem. People are stupid. They'll see that as "new game from so and so" and interpret it as such. Look at Bethesda releasing Arena and Daggerfall. People are idiots who don't understand that those games came out a while ago. And that has the potential to reflect poorly for the company. Albeit, Daggerfall is awesome, so it worked out.
Another argument would actually be XCOM. Apparently 2k own the rights to that. They are doing a remake/sidemake/whatever of that. Now, the new game is going to be an FPS with strategic components, whereas the original essentially defined an entire genre. If X-COM were to be largely re-released, it might affect sales of the new game. People who hate turn-based tactical games might get turned off. People who hate FPSs might be reminded of how they feel that games should be. And it would further demonstrate the differences, giving people fuel for the fire.
And then there is that one last potential problem: What if the game sells really well? Let's say Studio X has just released what they think will be a Modern Warfare 2 killer. Then their old game that they re-released sells considerably better. That will open a can of worms that nobody wants to deal with.
Plus, it is hard to sell a 2d wireframe-based game on the same service as Crysis. And pretty much the only DD service that doesn't want to cover the new shinies (GoG) has the problem of insisting on a very specific and rigid DRM model that many publishers might not approve of. So that restricts things.
That being said, we are facing a resurgence of re-releases. Now that DD services are strong and popular, we can get those. No longer do the publishers have to pay for shelf space. Instead, they just pay a small fee and then send an email containing a few blurbs. So give it time.

@Gundato
In the US, at least, laws are based on morals. Not only that, but the public, especially in their capacity as jurors are allowed to judge the merits of the law. This is how we put an end to such laws as The Fugitive Slave Act. According to US Supreme Court Justice, John Jay "It is presumed, that juries are the best judges of facts; it is, on the other hand, presumed that courts are the best judges of law. But still both objects are within your power of decision... you [juries] have a right to take it upon yourselves to judge of both, and to determine the law as well as the fact in controversy". State of Georgia v. Brailsford. In fact, a Jury's right to judge the law has been upheld 3 times by the US Supreme Court, so our laws are not only based on morals, but We The People, are allowed to apply our morals to the law.
Laws don't exist externally to the public, but rather are a collection of our morals.

Gun you really need to visit steam at some point :P Xcom has been available for what 2 years now, Lucasarts is releasing their back catalogue as are many many other companies it's cash for /maybe/ 12 hours work getting it to run in dosbox/scumm/other.

Compatibility is a major factor and GOG has stated this (specifically in reference to Kings Quest and Space Quest, and there may be other unreleased titles due to this), but System Shock not being here has nothing to do with that. They need a deal before they can find out if there are compatibility issues. Although I wonder if for the top games they test compatibility anyway so it's all sorted when they finally do get the games.
The reason GOG doesn't have some games other services do is I think mainly because GOG is different from other services in that it offers compatibility and DRM free releases. It's smaller size could be a factor, too, although it's obviously substantial at this stage.
This has probably been mentioned, but Outcast was one of the highest rated games and was released not too long ago. It's now removed from the wishlist to make room for another top game (which happens to be Deus Ex).
Developers have little or nothing to do with deals made -- publishers have the rights, although in some cases the publisher and developer are one in the same.
But yeah, they have been in a bit of a slump lately, although not so much for lack of quality as infrequency of releases (one a week, down from two a week). But as their recent Twitter post says, there's lots to come soon.