I agree that the defendant's argument that it's fair use to download copyrighted music seems not to be based in natural justice, or indeed first-order logic. As far as I can make out, that's what "copyright" means. But it's really only as arcane an argument as the judge's assertion that (and I paraphrase the article for effect) "well, if it was legal to download copyrighted music, then lots of people who currently don't do it would start doing it. And that seems like it wouldn't be a good thing for the music industry, so I rule against it". It surely shouldn't hinge on what the judge thinks is the *moral* perspective on file sharing.
I think all that has become clear to me about this case so far is why I never went on to become a lawyer!