Big media companies like, Google??? This is hardly the big guy vs. the little guy. If it were Viacom would be suing the uploaders which they are not. They are suing google/youtube for collecting ad revenue on their content and doing little about it. But if its all about ethics with you I can tell you only one of these companies helped China screen the internet of offensive materials for its people to "safely" consume, and it wasn't the evil Viacom corporation. How is that scrupulous?
While not big guy vs little guy, I think most people have a tendency to view it as vaguely 'good guy vs bad guy'.
Google's argument for access in China was that it was the lesser of two evils; I.E., better some access in China than no access in China. They made no secret about how they felt about China's censorship laws and petitioned to change them. While it's not an ideal situation, giving some help to the average Chinese citizen is better than not allowing any Google access at all.
However, in order for this case to work, Viacom should have to demonstrate actual financial harm caused specifically by YouTube's policies. YouTube has an active moderation system which consistently prunes videos that are tagged as copyright infringement. I find it hard to believe that this is anything but a misdirected measure to fight 'piracy' when honestly it's incredibly hard to find consistently good licensed content on YouTube either way because it's removed so quickly and the length of clips is limited. But then again, every time they go against an actual distributor like TVlinks, copycats in protected countries just pop up.
It's a losing battle and they should find a way to market free programming and still make money, like what NBC does with all of its programs (free HD streams with some ads) or South Park Studios.