I think Tabs are and should be legal. They are educational tools. They are not promulgated to take someone's music. They are to teach how to use your instrument to create music. I personally have had excellent experiences finding accurate tabs. I use them quite a bit.
(1) Sometimes you'll hear something and say "How's he doing that??" Like the beginning to Mean Streets, for example. I look at the tab and then say, "Oh, that's what he's doing!" Give it a try and I've learned something. Seeing it on paper sometimes also makes it easier to see the theory behind the licks.
(2) I'm in a band that does originals and covers. If I need to learn a few songs before the next practice, tab can be the quickest way to get from point A to point B. With tab I can learn 3 songs in one night. Without tab, it might take me the week to learn one complicated song. I'm not a young-un with nothing to do once my homework is done. I only get a limited amount of time each week to devote to guitar, so I'd rather spend it practicing than rewinding over and over and over.
Yeah, sometimes you run into some bad tab. It happens and you just figure for that song you're on your own. But songbooks are expensive. I've bought quite a few of them, but they're of limited use. One doesn't usually want to learn every sing Rush song out there, but you might want to learn a couple of them. So you're gonna spend $30 on a Rush book to learn Spirit and Limelight? And I've bought books that are of limited use because they don't always tab out all the parts. Or they tab out some songs and only provide the chords for others. And I've paid money for this!!!
For the flip side, here's where it hurts the artists. If I can get tabs for free, why would I ever buy a published songbook? And the artists and music publishers and studios get royalties from songbook sales. By having tabs out there, theoretically, those sales will drop. I'm sure the MPAA is getting financially whacked by tab sites.
But, as with everything in the music industry, they're going about this all wrong. What they should do is follow the iTunes model. Produce ACCURATE and COMPLETE tabs for all parts of the song. Make them available in files that play through powertab or guitarpro. Provide performance notes, gear information, amp and effect settings. Make them available for a reasonable monthly subscription - say $10 per month. I'm sure people would pay $10 per month for professionally transcribed, accurate and annotated tabs. Win by the merits, not by saber rattling. Provide something of actual value.
But these are paper publishers trying to keep the digital world at bay.
I'm going to keep using tabs. I see nothing illegal about it. It's educational. It's fair use. And if my band plays a cover song at a gig, it means I've bought the song myself, and if someone hears it and says, "hey I like that song" and goes home and grabs it off iTunes, then the artist should be happy. But remember, the publishing association doesn't care a whit about song sales, they want the paper sales.
